Salary to hourly pay: the full conversion table

Where 2,080 hours comes from, and when it is wrong

Every figure here uses 2,080 hours a year: 40 hours a week across 52 weeks. It is the convention, and for a salaried employee with paid time off it is the right one — you are paid for those holidays, so they belong in the divisor.

It is wrong in two common cases. If you are an hourly worker or a contractor, unpaid time off is not paid, so your real divisor is 2,080 minus whatever you take: three weeks off puts you nearer 1,960, which raises your true hourly rate by about 6%. And if you routinely work 45 or 50 hours for a fixed salary, your effective rate is 2,080/2,340 or 2,080/2,600 of the figure below — roughly 11% or 20% less than the table says.

These are gross figures

Nothing here is take-home. Federal income tax, state tax where it applies, and FICA at 7.65% all come out before the money reaches you, and 401(k) or insurance deductions come out on top of that. Depending on bracket and state, expect roughly 20–30% less in hand than the gross column shows.

The salary calculator applies the actual deductions if you want the net figure rather than the arithmetic.

Contractor rates are not the same conversion

A contractor quoting an hourly rate against a salaried equivalent is comparing two different things. Self-employment tax is 15.3% rather than the employee half of 7.65%, there is no employer contribution to health cover or retirement, and unpaid gaps between contracts are real. The common rule of thumb is to take the salaried hourly figure and add 25–40% before quoting.

Biweekly is not twice monthly

Biweekly pay means 26 cheques a year, not 24. Two months in every year contain three pay dates rather than two, which is why the biweekly column below is not simply half the monthly one. Budgeting against "two cheques a month" quietly understates your annual income by about 8%.