The Formula (and the 2,080-Hour Convention)
Annual salary = hourly rate × hours per week × weeks per year. The standard convention is 40 hours × 52 weeks = 2,080 hours, so a $30/hour job maps to $62,400/year.
The federal government uses a slightly different standard: 2,087 hours. Why? A year actually averages 52.18 weeks (365.25 ÷ 7), and because biweekly pay periods create 27-paycheck years roughly every 11 years, Congress standardized the average federal work year at 2,087 hours to smooth out pay. For offer comparison, 2,080 is the norm outside federal pay tables.
Comparing an Hourly Offer to a Salary Offer
Hourly and salaried offers differ in more than the arithmetic. Salaried roles usually come with paid vacation, sick leave, and often better benefits; hourly roles legally pay 1.5× for overtime (over 40 hours/week, non-exempt roles) — a real raise if the job has steady OT.
To compare fairly, value each side: reduce the salaried offer's weekly count for any unpaid leave, and estimate expected overtime hours at 1.5× before converting the hourly offer. A $28/hour job with 200 hours of annual overtime beats a $60,000 salary with identical benefits — the calculator shows the gap instantly when you adjust the inputs.
Where Real Paychecks Diverge: Overtime and Unpaid Time
Three adjustments matter most in practice:
- Overtime. Non-exempt hourly employees earn 1.5× past 40 hours/week. Salaried-exempt employees earn $0 extra, however long they work. If a "salaried" role expects 50-hour weeks, divide the salary by 2,080 times the actual hours — the effective hourly rate drops fast.
- Unpaid time off. Contract and gig work often pays 52 weeks only if you work 52 weeks. Planning 4 unpaid weeks? Set weeks per year to 48 and watch the annual number fall ~8%.
- Benefits gap. Employer health insurance is worth $6,000–$25,000/year in the US depending on plan and family size. An hourly offer without benefits needs that gap added to its hourly rate to be truly comparable.
Common Questions
How many work hours are in a year?
The standard convention is 40 hours × 52 weeks = 2,080 hours per year. The US federal government uses 2,087 hours as its official annual average (because a calendar year averages 52.18 weeks and biweekly pay periods produce 27-paycheck years periodically). Unless you are comparing against federal pay tables, 2,080 is the number to use.
Is this gross or net pay?
Gross (pre-tax). All conversions here — annual, monthly, biweekly, weekly — are before income taxes, Social Security, and Medicare. For take-home estimates, run the result through our Tax Calculator; effective take-home is typically 70–80% of gross depending on state and filing status.
How do I account for unpaid time off?
Lower the weeks-per-year input. Two weeks of unpaid vacation means 50 weeks; a typical US salaried job with 10 paid holidays and 15 paid vacation days nets about 47–48 paid weeks. Contract and gig workers who don't get paid time off should usually use 48–50 to be realistic.
Related Calculators
- Salary Calculator — Break an annual salary into pay periods and see raises over time
- Time Card Calculator — Weekly hours, overtime, and gross pay from clock-in/out times
- Tax Calculator — Turn gross pay into estimated take-home pay