Whether you're a freelancer benchmarking your rate against employee salaries, an
employer pricing a contract position, or just curious what your annual salary breaks
down to per hour, this calculator handles the conversion instantly with no sign-up.
The calculation is straightforward for gross rates:
Hourly = Annual Salary ÷ (Weeks per Year × Hours per Week)
The default assumes 52 weeks/year and 40 hours/week. The calculator also allows you
to adjust both variables — useful for:
- Part-time workers (e.g., 20 hours/week)
- Workers with more or less than 52 paid weeks (e.g., accounting for unpaid leave)
- Employees with paid time off included in their salary
Pre-tax vs. after-tax hourly rate
The calculator offers an estimated after-tax hourly rate for common US federal
income tax brackets (10%, 12%, 22%, 24%, 32%, 35%, 37%). Note: this is a simplified
estimate that does not account for state income taxes, deductions, or filing status.
Use it for ballpark comparisons only, not tax planning.
Frequently asked questions
How do I convert an hourly rate back to annual salary?
Annual = Hourly × Hours per Week × Weeks per Year. For a standard 40h/52w setup:
Hourly × 2,080 = Annual.
My contract says $X/day — how does that convert?
Divide by your daily hours to get the hourly rate, then multiply by your weekly hours
and weeks/year to get annual. For an 8-hour day: Daily rate × (260 working days) = Annual.
Why do freelancers charge 2–3× the equivalent employee hourly rate?
Because the employer portion of payroll taxes, benefits, equipment, management
overhead, and income gap risk are all borne by the freelancer rather than the company.
See the Freelance Rate Calculator for the full breakdown.
Step-by-step guide to converting annual salary to hourly rate — including part-time, overtime, and effective hourly rate after taxes.
Converting an annual salary to an hourly rate sounds simple — divide by 2,080 hours
(52 weeks × 40 hours). But that gives you a gross figure that ignores PTO, holidays,
benefits costs, and payroll taxes. Here is the complete picture.
Basic formula: salary ÷ 2,080
A $75,000 salary ÷ 2,080 working hours = $36.06/hour gross.
This is the rate an employer uses for overtime calculations and the figure most
pay stubs reference. But it is not what you actually earn per hour worked.
Accounting for paid time off
If you receive 15 days PTO + 10 federal holidays = 25 days off = 200 hours.
You work 2,080 − 200 = 1,880 hours per year. Your effective hourly rate:
$75,000 ÷ 1,880 = $39.89/hour. You are paid for the time you do not work
too, but if you want to know what you cost per productive hour, use this figure.
After-tax hourly rate
At a 22% effective federal tax rate and 6.2% FICA:
- Net salary: $75,000 × (1 − 0.22 − 0.062) = ~$53,850
- Net hourly (÷ 2,080): $25.89/hour take-home
Freelance rate vs. employed rate
Freelancers must add self-employment tax (15.3%), benefits, unpaid admin time, and
vacancy risk. A freelancer needing $75k equivalent must typically charge $55–$70/hour
to match the total compensation of a salaried employee.
Contractor vs Employee: True Hourly Rate Comparison
How to compare contractor day rates and employee salaries on an equivalent basis — a complete hourly rate breakdown including benefits and taxes.
Comparing a contractor day rate to a salaried position is like comparing apples to
oranges unless you adjust for all the hidden differences in total compensation.
What employees get that contractors don't
Benefit
Annual value (estimate)
Employer health insurance
$6,000–$14,000
Employer 401(k) match (4%) on $75k
$3,000
Paid vacation (15 days)
~$4,300 on $75k
Payroll tax (employer FICA)
7.65% of salary
Sick leave, parental leave
$1,000–$5,000
Total benefits load typically adds 25–40% on top of base salary.
Converting day rate to equivalent salary
A contractor billing 220 days at $500/day earns $110,000 gross. After:
- Self-employment tax: ~$15,000
- No employer benefits: −$20,000 lost vs. employed
- 20% admin/vacancy buffer
A $75k employee costs ~$36/hour in salary. A contractor doing equivalent work
needs to charge $55–$72/hour to be equally compensated after all taxes and costs.