What's the difference between gross pay and take-home pay?

Gross pay is your total earnings before any deductions. Take-home pay (net pay) is what you actually receive after taxes, insurance, retirement contributions, and other deductions are subtracted.

How do I calculate my hourly rate from an annual salary?

Divide your annual salary by the number of weeks you work per year, then divide that result by the number of hours you work per week. For example: $60,000 ÷ 52 weeks ÷ 40 hours = $28.85 per hour.

Are salaried employees eligible for overtime?

It depends on your exemption status. Non-exempt salaried employees are entitled to overtime pay (typically 1.5x) for hours worked over 40 per week. Most exempt employees do not receive overtime pay.

How accurate is the take-home pay estimate?

Our calculator provides a good estimate based on a single tax rate. Your actual take-home pay will vary based on federal/state/local taxes, filing status, and specific deductions like health insurance.

Should I include bonuses in my annual salary calculation?

For guaranteed bonuses, you can include them. For variable or performance-based bonuses, it's often better to calculate your base salary separately and treat bonuses as supplemental income.

How do paid holidays and vacation affect calculations?

Paid time off doesn't lower your annual salary. For calculation purposes, you are still paid for those weeks. If you want to find your hourly rate based only on hours physically worked, you can reduce the 'Weeks Per Year' input.

What is the federal minimum wage?

As of recent data, the federal minimum wage is $7.25 per hour. However, many states and cities have much higher minimum wage laws. Always check your local regulations.

How do I calculate shift differential pay?

Shift differential is extra pay for working less desirable hours. To calculate, add the premium to your base rate. For example, a $20/hour rate with a 10% differential becomes $22/hour ($20 + ($20 * 0.10)).

How does the calculator handle unpaid breaks?

The calculator uses the hours you input. You should only include paid working hours in the 'Hours Per Week' field. If your 40-hour week includes 2.5 hours of unpaid lunch breaks, you should enter 37.5 hours.

Can I use this tool for freelance or contract work?

Absolutely. Use the 'Annual to Hourly' feature to help set your rates. Remember to set a higher rate to account for self-employment taxes (approx. 15.3%), business expenses, and lack of benefits like paid time off.

Hourly Wage Calculator

Our advanced Hourly Wage Calculator provides instant conversion between hourly and annual pay, overtime calculations, and take-home estimates. Perfect for employees, freelancers, job seekers, and employers to understand compensation in any format.

Calculate Your Earnings

Hourly Wage ($)

Hours Per Week

Weeks Per Year

Overtime Rate

$52,000.00

Annual Salary

$4,333.33

Monthly Salary

$2,000.00

Bi-Weekly Salary

$1,000.00

Weekly Salary

Your Equivalent Hourly Wage

$25.00

Estimated Tax Rate (%)

$40,560.00

Annual Take-Home

$3,380.00

Monthly Take-Home

$19.50

Hourly Take-Home

How to Use the Calculator

Get instant wage conversions in three simple steps:

Enter Wage Info: Input your hourly rate or annual salary.
Adjust Parameters: Set your hours per week, weeks per year, and tax rate.
View Results: Instantly see conversions for all pay periods and take-home estimates.

Use the tabs to switch between calculation modes to explore different scenarios, like converting a salary to an hourly rate or estimating overtime pay.

Why Calculate Your Hourly Wage?

Job Comparisons

Objectively compare job offers with different compensation structures (e.g., hourly vs. salary).

Budget Planning

Accurately forecast your monthly and annual income for better financial planning and budgeting.

Negotiation Power

Understand your earning potential to effectively negotiate for a raise or a new job offer.

Understanding Your Paycheck: Common Deductions

The difference between your gross pay and take-home pay is due to deductions. Our calculator provides an estimate, but your actual paycheck will have specific deductions:

Federal & State Taxes: Based on your income, filing status, and location.
FICA Taxes: Mandatory payroll tax for Social Security (6.2%) and Medicare (1.45%).
Pre-Tax Deductions: Contributions for a 401(k) or health insurance premiums, which lower your taxable income.
Post-Tax Deductions: Deductions taken after tax, such as Roth 401(k) contributions.

Freelancer vs. Employee: A Financial Comparison

Choosing between employment and freelancing has major financial implications. Beyond the base rate, consider these factors:

Taxes

Freelancers pay the full Self-Employment Tax (15.3%), while employees have half (7.65%) paid by their employer.

Benefits

Employees often receive paid time off, health insurance, and retirement matching. Freelancers must cover these costs themselves.

Rate Setting

Freelancers must set a higher hourly rate than an employee’s equivalent to cover taxes, expenses, and lack of benefits.

Glossary of Key Financial Terms

Gross Pay: Your total earnings before any taxes or deductions are taken out.
Net Pay (Take-Home): The amount you receive after all deductions have been subtracted.
Exempt vs. Non-Exempt: Exempt employees (usually salaried) are not eligible for overtime. Non-exempt employees are.
FICA: The U.S. payroll tax used to fund Social Security and Medicare.