If you currently hold a salaried position, you may have wondered what your equivalent hourly wage is based on the number of hours you work each week. Our salary-to-hourly wage calculator can help you understand your earnings in a new light. Whether you’re comparing job offers, planning your finances or just satisfying your curiosity, this tool offers valuable insights into your earning power.
To use this tool, you’ll need to input the following information. Here’s a breakdown of what each field represents:
Hourly and salaried pay are two common methods employers use to compensate employees. In short, hourly employees are paid based on the exact amount of time spent on the job while salaried employees are paid a fixed amount per year, typically based on a 40-hour workweek (excluding any bonuses, commissions or benefits that may be offered).
Hourly pay is based on the number of hours worked. Employees are paid a set rate for each hour they work and, generally, they receive overtime pay for hours worked beyond the standard full-time hours. Usually, overtime pay is time and a half, or 1.5 times your normal hourly rate.
Unlike salaried employees with a fixed annual income, the total pay for hourly employees can vary significantly each pay period. This variation is due to factors, such as the total hours worked, any overtime accrued and additional stipends or bonuses provided by the employer. The hourly rate usually is agreed upon at the beginning of employment, and employees submit their total hours worked to receive payment at regular intervals, such as weekly or biweekly.
As of 2023, the Fair Labor Standards Act (FLSA) mandates that employers must pay hourly workers at least the federal minimum wage, currently set at $7.25 per hour. Additionally, the FLSA defines overtime as any work done beyond a standard 40-hour workweek, requiring employers to compensate overtime hours at a rate of at least 1.5 times the regular hourly wage. For instance, an employee earning $20 per hour and working 45 hours in a week would receive $950, calculated as $800 for the regular hours and $150 for the overtime hours. Many states have higher minimum wage requirements beyond the federal minimum.
Hourly wages serve as the base pay and do not typically include other forms of compensation such as health insurance, retirement contributions or bonuses, although these may be offered by some employers.
Salaried pay is a fixed compensation structure where employees receive a predetermined amount, often expressed as an annual figure, regardless of the number of hours worked. This salary usually is divided into regular payments delivered weekly, biweekly or monthly. For example, an employee with an annual salary of $60,000 might receive 12 monthly payments of $5,000 before taxes.
Salary ranges for various roles are often determined based on industry standards, such as the nature of the work, required skills, educational level, geographic location and industry demand.
To qualify as a salaried employee under the FLSA, an individual must be paid a minimum of $684 per week or $35,568 per year. However, as of November 2023, the U.S. Department of Labor is considering raising this threshold to $1,059 per week ($55,068 per year). This classification typically exempts salaried employees from receiving overtime pay.
Salaries are the base rate of pay and do not include other types of compensation such as bonuses, commissions, stipends, reimbursements or benefits like health insurance and retirement contributions. Employers establish salaries to maintain competitiveness and attract talent, taking into account the overall compensation package beyond just the base salary.
Salaried employees, while entitled to their full salary regardless of hours worked, can have deductions from accrued leave for vacation, personal absences or sick days.
A company’s human resources department usually determines whether an employee is hourly or salary. Here are a few advantages and disadvantages of hiring an hourly employee.
Consider hiring an hourly employee if consistent work isn’t available to support a full-time salaried position.
Below are the advantages and disadvantages of hiring a salaried employee. [Learn about exempt employees.]
Converting an annual salary into an hourly wage can be particularly informative for salaried employees who regularly work beyond the standard 40-hour workweek so they can better quantify the value of their time and efforts.
Using our salary-to-hourly calculator can help workers and their employers make informed decisions about their finances and employment arrangements. For employees, it provides a clearer understanding of their true earnings when it comes to the hours they work.
For employers, this practice aids in accurate budgeting and workforce management, especially when dealing with project-based work or fluctuating workloads. Converting salaries to hourly rates can also enhance compliance with labor laws — especially those governing overtime pay — by ensuring that employees are compensated fairly for all the time they dedicate to their jobs.