Doubling the hourly rate gives a rough annual salary, but it can mislead you when you are choosing between two offers. Here is a step-by-step method, with a worked example of $30 an hour against $62,000 a year, that counts paid time off, overtime, real hours and benefits.
One offer pays $30 an hour. The other pays $62,000 a year. Multiply $30 by 2,080 working hours and the hourly job comes out at $62,400, so it looks like a draw, or a narrow win for the hourly job.
That shortcut assumes both jobs have the same hours, the same paid time off, no overtime and the same benefits. They rarely do. This guide works through the comparison properly, one step at a time.
Run your own numbers: the Hourly to Salary Calculator converts in both directions and handles overtime, unpaid days off and the weeks you actually work. Every figure below comes from it.
The two offers
| Offer A: hourly | Offer B: salaried | |
|---|---|---|
| Pay | $30 an hour | $62,000 a year |
| Normal hours | 40 a week | “40”, but the team really works about 45 |
| Overtime | About 3 hours a week on average, at 1.5× | Not paid |
| Time off | 20 days a year, unpaid (holidays and vacation) | 25 paid days (15 vacation + 10 holidays) |
| Retirement | No match | 4% 401(k) match |
| Health insurance | You pay $250 a month more than with B | Cheaper employee premium |
Step 1: the headline conversion
The standard conversion assumes 40 hours a week for 52 weeks:
- Offer A: $30 × 40 × 52 = $62,400 a year.
- Offer B: $62,000 ÷ 2,080 = $29.81 an hour.
This is where most comparisons stop, and it says the offers are within 1% of each other.
Step 2: unpaid time off and overtime
An hourly job usually pays only for hours worked. Offer A’s 20 unpaid days cost 20 × 8 × $30 = $4,800. Its overtime adds 3 hours × $45 × 52 weeks = $7,020.
In the calculator, enter $30 an hour, 40 hours, 3 overtime hours at 1.5×, 52 weeks and 20 unpaid days off. The adjusted figure is $64,620 a year, earned over 2,076 hours, which is $31.13 for every hour actually worked.
Overtime is often the deciding factor. It is also the least certain number in an offer, so ask what a typical month looks like and do not count on more than the team really works.
Step 3: the hours the salaried job really takes
A salary is fixed whatever the hours. If Offer B’s team works 45 hours a week and you have 5 weeks of paid leave, you work about 45 × 47 = 2,115 hours a year. In the calculator, switch to salary → hourly and enter 45 hours and 47 weeks worked: $29.31 an hour.
So on pay alone, the hourly job is ahead by almost $2 for every hour you work. If you are not sure what the salaried hours really are, track a few weeks of a similar job with the Time Card Calculator, or ask people who work there.
Step 4: add the benefits
Benefits are pay in a different form, so add their yearly value:
- Offer B’s 4% retirement match is worth 4% × $62,000 = $2,480 a year, if you contribute enough to get it.
- Offer B’s cheaper health insurance saves you $250 × 12 = $3,000 a year compared with Offer A.
Offer B’s total value is now $62,000 + $2,480 + $3,000 = $67,480. Divided by 2,115 hours, that is $31.91 an hour.
The result, and when it flips
| Offer A | Offer B | |
|---|---|---|
| Headline yearly pay | $62,400 | $62,000 |
| Yearly pay after time off and overtime | $64,620 | $62,000 |
| Total value including benefits | $64,620 | $67,480 |
| Hours worked a year | 2,076 | 2,115 |
| Value per hour worked | $31.13 | $31.91 |
With benefits counted, Offer B moves ahead by about 80 cents an hour. That is close enough that the hours decide it. At 45 hours a week Offer B wins; above about 46 hours a week Offer A wins; at 50 hours Offer B is worth only $28.71 for each hour you work.
That is the real lesson: compare total value per hour actually worked, and test how the answer changes if the hours or the overtime turn out different from what you were told.
Other things that change the answer
- Paid sick days. If you are sick 5 days a year in an hourly job without sick pay, that is another week’s pay lost.
- Employee or contractor. An hourly contract role (a 1099 in the US) usually means paying both the employee and employer share of Social Security and Medicare, 15.3% instead of 7.65% on most earnings, with no benefits at all. Contractors typically need a noticeably higher rate just to break even with an employee.
- Overtime rules. In the US, many salaried professional roles are exempt from overtime, while hourly non-exempt workers must be paid 1.5× for hours over 40 a week. Other countries and some states have different rules.
- Stability. Hourly hours can be cut in a slow month; a salary usually cannot.
- Bonuses and raises. A salaried role with a reliable annual bonus or faster progression can be worth more over a few years. The Pay Raise Calculator shows what a percentage raise means per paycheck.
- Commuting and remote work. An hour of unpaid commuting each day is about 230 hours a year, which lowers your real hourly rate.
A quick reference
For a standard 40-hour, 52-week year, every $1 an hour is about $2,080 a year. Our salary to hourly chart lists common figures both ways, and there are pages for specific amounts such as $60,000 a year and $30 an hour. All the figures in this guide are before tax.
Frequently asked questions
How do I convert an hourly wage to a salary?
Multiply the hourly rate by the hours you work per week, then by 52. At 40 hours a week that is 2,080 hours, so $30 an hour is $62,400 a year. Subtract any unpaid time off and add any overtime for a realistic figure.
Is $30 an hour better than a $60,000 salary?
On paper $30 an hour is $62,400 a year, slightly more. In practice it depends on whether the hourly job pays for holidays and leave, whether you get overtime, how many hours the salaried job really expects, and the benefits each offers.
Do salaried employees get paid overtime?
Many do not. In the United States, salaried employees in many professional, administrative and managerial roles are exempt from overtime, but salaried workers paid below a federal minimum threshold, and some others, must still receive it. Rules vary by state and by country, so check your contract.
Should benefits count as part of the salary?
For comparing offers, yes. An employer retirement match, a lower health insurance premium or extra paid leave is money you would otherwise spend or not receive. Add their yearly value to each offer before comparing.