Our Salary vs Hourly Calculator helps you look beyond the base numbers to understand the true value of a job offer. Convert between pay structures, factor in work hours, and see a clear comparison to make confident financial decisions.
Compensation Calculator
How to Use the Calculator
Our calculator simplifies compensation comparison into three easy steps:
- Choose a Conversion Mode: Use the tabs to select whether you’re converting from salary-to-hourly or hourly-to-salary.
- Enter Your Numbers: Input your pay rate and the standard hours worked per week and weeks per year.
- Analyze the Results: The tool instantly shows the equivalent pay rates, allowing you to see a clear, direct comparison of the two compensation structures.
Why Compare Salary and Hourly Pay?
Job Offer Evaluation
Confidently compare job offers with different pay structures to see which is truly better financially.
Financial Planning
Understand your true earning potential to budget more effectively and plan for future financial goals.
Career Decisions
Make informed choices when considering freelance work, part-time roles, or a shift in employment type.
Beyond the Paycheck: The True Value of Employee Benefits
A higher hourly rate might seem better than a lower salary, but this can be misleading. Employee benefits, often called “total compensation,” can add 20-40% to your base pay. When comparing offers, it’s crucial to assign a monetary value to the benefits included with a salaried position.
- Health Insurance: If a company covers the full premium for health, dental, and vision insurance, this can be worth thousands of dollars annually. Find out the monthly premium to calculate its yearly value.
- Retirement Contributions: A 401(k) or 403(b) match is essentially free money. A common match is 50% of your contribution up to 6% of your salary. For a $60,000 salary, this is an extra $1,800 per year.
- Paid Time Off (PTO): Hourly workers are often not paid for vacation, holidays, or sick days. To calculate the value of PTO, multiply your equivalent daily rate by the number of paid days off. For example, 20 days of PTO at a daily rate of $230 is worth $4,600.
- Other Perks: Don’t forget to consider other benefits like life insurance, disability insurance, professional development funds, and tuition reimbursement. These all have a tangible financial value.
Exempt vs. Non-Exempt: A Critical Distinction for Overtime
The right to earn overtime is not determined by whether you are paid a salary or by the hour. It is determined by your classification as either an “exempt” or “non-exempt” employee under the Fair Labor Standards Act (FLSA).
Non-Exempt Employees are entitled to overtime pay, typically 1.5 times their regular hourly rate, for any hours worked over 40 in a week. Most hourly workers fall into this category.
Exempt Employees are not eligible for overtime pay. To be classified as exempt, an employee must meet specific criteria related to their job duties (typically administrative, professional, or executive roles) AND be paid a salary above a certain threshold. Simply receiving a salary does not automatically make you exempt.
This distinction is vital. A non-exempt salaried employee must still be paid overtime if they work more than 40 hours. When evaluating a salary offer, it’s important to understand your classification and realistically estimate the number of hours you’ll be expected to work.
Navigating Overtime Laws: Federal vs. State Rules
While the federal standard for overtime is set by the FLSA, many states have their own laws that provide greater protection for workers. This can significantly influence the financial comparison between salary and hourly roles.
- Federal Law (FLSA): Requires overtime pay for non-exempt employees for hours worked over 40 in a workweek.
- State Laws: Some states, like California, Alaska, and Nevada, have daily overtime rules. For example, in California, non-exempt employees are entitled to overtime for working more than 8 hours in a single day, even if they don’t exceed 40 hours in the week.
- Double Time: Certain states also mandate “double time” (2x the regular rate) for hours worked beyond a specific daily or weekly threshold (e.g., over 12 hours in a day in California).
An hourly job in a state with daily overtime rules can be substantially more lucrative if long workdays are common. Always check your specific state and local labor laws to fully understand your potential earnings.
Strategic Negotiation: How to Discuss Your Pay
Whether you’re negotiating a new job offer or asking for a raise, our calculator can be a powerful tool to support your request. Use the data to build a strong, logical case for your desired compensation.
- If Negotiating a Salary: Use the calculator to convert your target salary into an hourly rate. You can frame your request by saying, “Based on the market and the value I bring, I am targeting a compensation package equivalent to $XX per hour, which corresponds to an annual salary of $YYY,YYY.” This shows you’ve done your homework.
- If Negotiating an Hourly Rate: If you are moving from a salaried role, calculate the hourly rate that would match your previous total compensation, including the value of lost benefits like PTO and 401(k) matching. This helps justify a higher hourly rate than a simple conversion would suggest.
- Focus on Total Value: When discussing salary, always talk about “total compensation.” If the salary offer is lower than you’d like, you can negotiate for more PTO, a higher 401(k) match, or a larger professional development budget, all of which have a clear monetary value.
Frequently Asked Questions
Salary employees receive a fixed annual amount, paid in regular intervals, regardless of the exact hours worked. Hourly employees are paid for each hour they work, including overtime (usually 1.5x pay) for hours over 40 per week.
The standard formula is to divide your annual salary by 52 (the number of weeks in a year), and then divide that result by 40 (the standard number of hours in a workweek). Our calculator automates this for you.
Not necessarily. Salary offers predictable income and often better benefits. Hourly offers overtime pay and greater flexibility. The “better” option depends entirely on your career goals, need for flexibility, and the specifics of the job offer.
No. Overtime eligibility is based on being “exempt” or “non-exempt.” Most salaried employees are exempt, but some may be classified as non-exempt based on their job duties and pay level, making them eligible for overtime pay.
Benefits like health insurance, retirement matching, and paid time off can increase the total value of your compensation by 20-40%. A lower-paying salaried job with excellent benefits can be more valuable than a higher-paying hourly job with none.
Since hourly workers are only paid for hours worked, any time taken off for vacation, sickness, or holidays is usually unpaid. This can significantly reduce annual earnings. For example, two weeks of unpaid vacation for a worker earning $25/hour is a $2,000 reduction in annual pay.
These are legal classifications under the Fair Labor Standards Act (FLSA). “Non-exempt” employees are legally entitled to overtime pay. “Exempt” employees are not. The classification depends on job duties and salary level, not just the pay structure.
If your hours fluctuate, try to estimate your average weekly hours over a typical year. Include any predictable overtime during busy seasons and slower periods with fewer hours to get the most accurate annual comparison.
Absolutely. By converting your current pay and a proposed pay into different formats (e.g., showing the equivalent hourly rate of a salary), you can frame your negotiation with clear, data-driven points about your financial value and targets.
No. Your privacy is paramount. All calculations are performed directly in your browser. No financial or personal data is ever stored, tracked, or transmitted to any server.