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How to Convert Hourly Pay to Annual Salary

By Frame Sixty Labs · Last updated: October 30, 2026

How do I convert hourly pay to a salary?

The formula is rate × hours per week × paid weeks per year. Five steps get you from a rate to a number you can plan around:

1. Find your paid hours per week. Use the hours you are actually paid in a typical week, in decimal. 37:30 is 37.5 hours, not 37.3.
2. Multiply by your hourly rate. Rate times weekly hours gives gross weekly pay. $20.00 times 40 hours is $800.00.
3. Multiply by the paid weeks in your year. Use 52 if every week is paid, including holidays and vacation. $800.00 times 52 is $41,600.
4. Subtract unpaid time. Take out unpaid holidays, unpaid vacation and seasonal gaps. Ten unpaid eight-hour holidays remove 80 hours, or $1,600 at $20.00 an hour, leaving $40,000.
5. Add overtime you can count on. Price overtime hours at the overtime rate. Five extra hours a week at $25.00 an hour and time-and-a-half is 5 times $37.50, or $187.50 a week, which adds $9,750 over 52 weeks.

The 2,080 comes from 40 × 52. How many work hours are in a year explains why payroll uses that round figure even though most years hold 261 weekdays, or 2,088 hours. At $20.00 an hour the gap is only $160, so 2,080 is fine for planning.

What does each hourly rate come to per year?

At 40 hours a week with all 52 weeks paid, before taxes:

The monthly column is the annual figure divided by 12. It is not the weekly figure times 4, which is the most common slip: $800 × 4 = $3,200, while the true average is $41,600 ÷ 12 = $3,466.67. A month is about 4.33 weeks, and over a year those extra days add up to four more weeks of pay.

The same logic applies to paychecks. A biweekly check of $1,600 happens 26 times a year ($41,600). Multiplying it by 24 gives $38,400 and quietly loses two paychecks.

What if I don’t work 40 hours a week?

Replace the 40 with your real weekly hours. Here is $25.00 an hour across common schedules:

Watch the 37:30 row. Thirty-seven and a half hours is 37.5, not 37.30. Typing the clock digits as a decimal gives $48,490 instead of $48,750, which is $260 a year that was never missing. Converting hours to decimal covers the rule: divide the minutes by 60.

How does unpaid time off change the number?

The 2,080 formula assumes you are paid for every week of the year. Many hourly jobs don’t pay for holidays or time off, and those hours come straight out. At $20.00 an hour on a 40-hour week:

This is where the popular shortcut — double the rate and add three zeros — comes from. It uses 2,000 hours, so $20.00 becomes $40,000. That matches the second row exactly, and it runs about 4% low if every week is paid. It is a good estimate, not a formula to budget on.

How do I annualize hours that change every week?

Don’t project from one week. Take a run of real weeks, work out what they paid, and scale it up. Four weeks is convenient, because 4 × 13 = 52.

Say you earn $22.00 an hour, with time-and-a-half over 40 hours in a week. Your last four timesheets, in hours and minutes:

Overtime is counted week by week, so weeks 2 and 4 each have some even though the four-week average is only 39:10. Now convert and price each column:

• Regular: 155:05 is 155.08 hours, and 155:05 × $22.00 = $3,411.83
• Overtime: 1:35 is 1.58 hours, and 1:35 × $33.00 = $52.25
• Four weeks of gross pay: $3,464.08
• Annualized: $3,464.08 × 13 = about $45,033

The 2,080 formula would have said $22.00 × 2,080 = $45,760, about $727 too high for this worker. Calculate from the exact minutes, too: rounding to 155.08 and 1.58 before multiplying can move the result by a few cents, and those cents get multiplied by 13.

Add the timesheets correctly as well. Typing those four weeks as 38.45 + 41.30 + 36.20 + 40.05 gives 156.00 instead of the real 156:40. At $22.00, that understates a year of straight-time pay by $190.67. Four weeks is only a sample, so if your hours swing with the seasons, use more of them. Your average hours per week over a longer stretch will hold up better.

How do I include overtime in an annual figure?

Price the overtime hours at the overtime rate, rather than just adding them to the weekly hours. At $25.00 an hour and a steady 45-hour week:

• Regular: 40 × $25.00 = $1,000.00
• Overtime: 5 × $37.50 = $187.50
• Weekly: $1,187.50, or $61,750 over 52 weeks

Plain 45 × $25 × 52 gives $58,500, leaving out $3,250 of premium. Count overtime only if it is dependable, though. A year of overtime you can’t count on is a nice surprise, not a salary. The details are in how to calculate overtime.

How do I compare a salary offer to an hourly job?

Compare them on the same footing: yearly gross and the hours it takes to earn it. A $60,000 salary is $28.85 an hour only if the job really is 40 hours a week.

On these assumptions, the hourly job pays less at a flat 40 hours, and more once three overtime hours a week are regular. Pay is only part of the comparison, so also weigh paid time off, health coverage and retirement contributions, which can be worth more than the difference. And don’t assume a salary rules out overtime: whether a salaried job is exempt depends on its duties and pay, not on the word “salary”.

Is the annual figure what I’ll take home?

No. Everything on this page is gross pay. Taxes, insurance premiums and retirement contributions come out afterward, and how much depends on where you live and what you have elected, so no single percentage fits everyone. Your own pay stub is the best guide: divide your net pay by your gross pay and you have your actual take-home share.

What are the common hourly-to-salary mistakes?

• Using 2,080 for a job that doesn’t pay 2,080. Part-time hours and unpaid time off both shrink the multiplier.
• Multiplying weekly pay by 4 for a month. Annual divided by 12 is the true average.
• Projecting from your best week. One 45-hour week doesn’t make a 45-hour year. Average several.
• Averaging away overtime. Overtime belongs to each week, so a 39:10 average can still include paid overtime.
• Treating H:MM as a decimal. 7:45 is 7.75 hours, not 7.45.

Frequently asked questions

How do you convert hourly pay to an annual salary?

Multiply the hourly rate by paid hours per week, then by 52. At 40 hours a week the multiplier is 2,080, so $25.00 an hour is $52,000 a year before taxes. Subtract any weeks or holidays you are not paid for.

How much is $20 an hour per year?

$41,600 a year at 40 hours a week, with all 52 weeks paid. That is $800 a week, $1,600 every two weeks and about $3,466.67 a month, before taxes.

How much is $25 an hour per year?

$52,000 a year at 40 hours a week, with all 52 weeks paid. At 30 hours a week it is $39,000.

How do you convert a salary to an hourly rate?

Divide the annual salary by the hours you work in a year. At 2,080 hours, $50,000 is $24.04 an hour. If the job really takes 45 hours a week, divide by 2,340 instead: $60,000 then works out to $25.64 an hour rather than $28.85.

Why do people say double the hourly rate and add three zeros?

That shortcut multiplies by 2,000 hours, not 2,080, so $20.00 an hour gives $40,000 rather than $41,600. It is a fair estimate if about 80 hours of your year are unpaid, and about 4 percent low if every week is paid.

How do I work out monthly pay from an hourly rate?

Calculate the annual figure and divide by 12. At $20.00 an hour and 40 hours, that is $41,600 divided by 12, or $3,466.67. Multiplying the weekly pay by 4 gives $3,200 and leaves out about four weeks a year.