Salary Calculators

Understanding Salary vs. Hourly Pay

A salary is a fixed annual compensation paid regardless of the number of hours worked in a given week, while hourly pay scales directly with hours worked. Salaried employees in the US are exempt from overtime rules if they earn above the FLSA threshold ($684 per week as of 2025) and meet certain duties tests. To compare offers expressed in different pay frequencies, divide the annual salary by 2,080 (52 weeks × 40 hours) to get the implied hourly rate, or multiply an hourly rate by 2,080 to get the annualised equivalent.

Salary Conversion Formulas

Converting between pay periods uses straightforward arithmetic. Annual to monthly: divide by 12. Annual to biweekly: divide by 26 (there are 26 biweekly pay periods per year). Annual to weekly: divide by 52. Annual to daily: divide by 260 (52 weeks × 5 working days). Annual to hourly: divide by 2,080 (assuming 40 hours per week, 52 weeks). These conversions assume full-time employment; part-time calculations use the actual hours per week and weeks worked per year.

Overtime Pay Rules

Under the US Fair Labor Standards Act (FLSA), non-exempt employees must be paid at least 1.5 times their regular rate for all hours worked over 40 in a workweek. Some states have additional overtime rules — California, for example, requires daily overtime (1.5x after 8 hours, 2x after 12 hours). The overtime rate is calculated on the "regular rate of pay," which includes most forms of compensation beyond the base wage, including non-discretionary bonuses. Misclassifying employees as exempt to avoid overtime obligations is a common and costly labour law violation.

Comparing Job Offers Across Pay Structures

When comparing a salaried offer against a freelance or hourly rate, account for benefits, paid time off, and self-employment tax. An employee earning $80,000 salary also receives employer-paid payroll taxes (7.65%), and often health insurance, retirement contributions, and paid leave worth an additional 20–30% of salary. A freelancer charging an equivalent hourly rate needs to cover all of these costs independently, which means a freelance rate 30–40% higher than a salaried equivalent is often necessary to achieve the same net compensation.