Hourly Rate to Annual Salary: Formula and Examples

To convert an hourly wage to annual salary, multiply the hourly rate by the number of hours worked each week, then multiply by the number of paid working weeks in the year.

The familiar shortcut uses 40 hours per week and 52 weeks per year, but that assumption does not fit every schedule. Part-time hours, unpaid time off, seasonal work, and unpaid breaks can materially change the estimate.

Hourly rate to annual salary formula

Annual gross pay = hourly rate x hours per week x working weeks per year.

At $25 per hour, 40 hours per week, and 52 working weeks, the calculation is $25 x 40 x 52 = $52,000 per year before taxes and deductions.

Calculate weekly and monthly pay

Weekly gross pay is the hourly rate multiplied by weekly hours. At $25 per hour for 40 hours, weekly gross pay is $1,000.

Average monthly gross pay is annual gross pay divided by 12. A $52,000 annual estimate produces an average of $4,333.33 per month. This is an average, not necessarily the amount of each paycheck.

Adjust the formula for your schedule

Someone earning $30 per hour for 35 hours per week and working 48 paid weeks would estimate $30 x 35 x 48 = $50,400 in annual gross pay. Using the 40-by-52 shortcut would overstate that schedule.

Choose the right number of working weeks

Use 52 weeks when the hourly employee expects to receive pay for all 52 weeks. Reduce the number when the estimate should exclude unpaid weeks. Do not subtract paid vacation weeks if the employee still receives normal pay for them.

Convert annual salary back to hourly pay

Reverse the formula by dividing annual salary by total working hours. A $52,000 salary divided by 2,080 hours, which is 40 hours multiplied by 52 weeks, equals $25 per hour.

What this estimate includes and excludes

• It estimates gross base pay from the schedule you enter.
• It does not automatically add overtime, bonuses, commissions, tips, or shift premiums.
• It does not subtract federal, state, or local taxes, insurance, retirement contributions, or other deductions.
• It is not a comparison of benefits or total compensation between hourly and salaried positions.

Use a schedule-specific conversion

The Hourly to Salary Calculator lets you change weekly hours and working weeks, then shows hourly, weekly, monthly, and annual estimates together. You can also reverse the direction to estimate an hourly equivalent from annual salary.