Hourly to salary: how to convert your wages and what to expect when transitioning

Katy Boyles |
Katy (she/her) is our Social Media Manager at Snagajob, where she loves talking to hourly workers and employers all day long. Her first hourly job was as a hostess.

Depending on a role and its permanence within a company, a job typically pays either hourly or salary. Often temporary, contract, and part-time positions are hourly and then transition into salaried full-time employees. When moving from hourly to salary, many companies add benefits such as health insurance, paid time off, or flexible working hours or locations. Converting from hourly to salary? Learn more about calculating hourly to salary and what to expect when transitioning. 

Hourly to salary calculator 

An easy way to convert hourly to salary is to multiply the number of hours you work per week by your current hourly wage, then multiply that number by 52 (the number of weeks in a year). If your hourly pay at Starbucks is $15 per hour and you work 4o hours a week, you would need to multiple 15 by 40 to get 600. You are making $600 per week, and your hourly monthly salary is $2400. If you want to know your annual salary, multiply 600 by 52 to get 31,200. Fifteen dollars hourly to salary wage is $31,200. Knowing how to convert your salary to an hourly rate is essential to ensure you're not taking a pay cut when converting to salary pay. 


Hourly wage x number of hours your work per week = your weekly income

Weekly income x 52 = Salary income

Annual salary to hourly converter

Salary workers choosing to take an hourly job need to know how much they make an hour to see if a job is worth taking. If you make 3000 per month and want to know how to calculate the hourly rate from the monthly salary, it's easy. If you work 40 hours per week, multiply that by 4, for the number of weeks in a month to get 160, the total number of hours you work in a month. Take what you make per month and divide it by 160 to calculate your hourly salary, 3000 divided by 160 is 18.75. If you work 40 hours a week and earn 3000 per month, you're being paid $18.75 per hour. 


Number of hours you work per week x 4 = number of hours you work per month

Monthly income / number of hours you work per month = hourly pay 

Calculating hourly wage from monthly income

If you know how much you are making per month, you can use it to calculate what you're being paid hourly.  If you want to know your hourly pay at Home Depot and earn $45,000 salary, divide it by 2080 (40 hours per week multiplied by 52 weeks per year) to get $21.63.  


Salary / 2080 = hourly pay

Benefits of working as an hourly employee

There are different types of hourly employees; some are contract and work full-time and may receive benefits, while others can be part-time and have minimal benefits. When being paid hourly, you are only paid for the time you work. You clock in and out or have to submit a timesheet. If you work more than 40 hours a week, your employer must pay overtime. Many hourly employees also get holiday pay (usually time and a half). If you're not full-time, you can have more control over your schedule hourly vs. salary, working for multiple companies or clients. 

Disadvantages of working hourly vs. salary

One of the main drawbacks of working hourly vs. salary is the lack of benefits. Many hourly jobs are not considered full-time unless you work a certain number of hours a week, which is not always guaranteed. Hourly pay is not always as stable as a salaried employee. As an hourly worker, you may not have any benefits at all, like paid time off. If you do not get PTO, when you're not working, you're not being paid. Hourly and contract employees do not have severance benefits and are the most likely to be laid off during hard times within a company. When working contract and hourly, some companies pay more to compensate for the lack of benefits, but it's often 1099 tax form rather than a W-2 (where federal, state, and other taxes are automatically withheld from each check), so while the pay seems like more, at the end of the quarter or year, you typically have to pay taxes and do not get a refund. 

Benefits of working salary vs. hourly

Salaried employees have more job security and benefits compared to hourly employees. There is more predictability and stability in pay, as the paychecks and hours do not typically vary from month to month. It's common for salaried employees to get paid the same no matter how many hours they work, without overtime or holiday pay. You could work 30 hours one week and then 50 the next and get paid the same each week. However, salary employees are more likely to get paid time off like sick days and vacation. Benefits may include health care, maternity/paternity leave, retirement plans, stock options, bonuses, and more. 

Disadvantages of working salary vs. hourly

Once converted to salary, you're typically more settled into a job. It's harder to move from position to position. You may end up working more, including overtime and holidays, without any additional pay. Before converting from hourly to salary, ask how many hours on average you will be asked to work per week. If you're calculating your hourly wage based on 40 hours a week but will work on average 60 hours or more, then your hourly pay will actually be less. 

What to expect when transitioning

When you transition from an hourly to a salary rate, a few things may change for you. Because you're paid a salary, you likely do not need to submit a timesheet, clocking in and out, or logging your hours worked (unless you are paid for overtime in your new salary position). Typically salary jobs are paid biweekly, direct deposit. When you become a salaried employee, you may be offered benefits like healthcare (for you and your family), retirement plans (ex. 401k), stock options, annual raises, and life insurance that you will need to decide on as part of your new onboarding. As a salaried employee, you may have more responsibilities (if you're being promoted). When working salary, you may be expected to answer emails or phone calls outside of your regular working hours, and there may be more ambiguity about when to take breaks or lunch. 

Knowing how to convert your wages is important for moving from a salary to hourly or vise versa payment. You can easily calculate what you make annually from your hourly salary or see what your hourly pay converts to on a salary. Salaried employees are typically full-time employees with a more permanent position in the company and may be eligible for benefits. Hourly employees typically contract or part-time employees and may be eventually converted to full-time salary employees after working for the company for a while or once a permanent position opens up. There are benefits and disadvantages for working hourly vs. salary, and it depends on your career and lifestyle to figure out what type of employment works best for you.