Hourly rate to annual salary — and what you actually keep
Most hourly-to-annual calculators stop at "you make $X a year." This one goes further — what you actually take home after federal taxes.
The conversion formula
The math is simple:
Annual salary = Hourly rate × Hours per week × 52 weeks
So if you make $25 per hour and work 40 hours per week:
$25 × 40 × 52 = $52,000 per year.
That's your gross annual pay. It's the number you'd put on a job application or a loan form. It's also the number that gets quoted in salary comparisons.
Why "annual salary" doesn't tell the whole story
That $52,000 isn't what hits your bank account.
Federal income tax, Social Security, and Medicare all come out of every paycheck before you see it. The number that actually matters for your budget is your take-home pay — what's left after those three taxes.
For someone earning $52,000, single, paid biweekly, with no pretax stuff like 401(k) — the take-home is about $1,691 per paycheck, or $43,962 per year. You keep about 84.5% of your gross.
The rest goes to the IRS and the Social Security Administration. About 7.8% of your gross goes to federal income tax, and another 7.65% goes to FICA (Social Security plus Medicare).
This is why "I make $52K" and "I take home $44K" can both be true at the same time. The first is what you earn. The second is what you can spend.
A real example
Let's walk through it. You make $25 per hour and work 40 hours per week. You're single, paid biweekly, no 401(k) or pre-tax health insurance yet.
Here's what your paycheck looks like:
- Annual salary: $52,000
- Per paycheck (biweekly): $2,000 gross
- Federal income tax: $156
- Social Security: $124
- Medicare: $29
- Take-home per paycheck: $1,691
- Take-home per year: $43,962
You keep about 84.5% of your gross. The other 15.5% is split between federal income tax (about 7.8% of your gross) and FICA (7.65% of your gross — that's 6.2% Social Security plus 1.45% Medicare).
Quick reference: common hourly rates and hours
Here's the annual gross for some common combinations. Take-home depends on your filing status and deductions, so use the calculator for that.
| Hourly rate | Full-time (40 hrs) | Part-time (30 hrs) | Part-time (20 hrs) |
|---|---|---|---|
| $15/hr | $31,200/yr | $23,400/yr | $15,600/yr |
| $20/hr | $41,600/yr | $31,200/yr | $20,800/yr |
| $25/hr | $52,000/yr | $39,000/yr | $26,000/yr |
| $30/hr | $62,400/yr | $46,800/yr | $31,200/yr |
| $40/hr | $83,200/yr | $62,400/yr | $41,600/yr |
These numbers all assume you work 52 weeks a year. If you take unpaid time off, your actual annual gross will be lower.
PTO, holidays, and the 52-week assumption
The "× 52" part of the formula assumes you work every week of the year. That's true for some hourly workers and not true for others.
If you get paid time off (PTO) and paid holidays, your annual gross still works out to about hourly × hours × 52 — because PTO and holidays pay you at your normal rate. You just aren't physically at work.
If your time off is unpaid — typical for many hourly retail, food service, and gig roles — every week off is a week of zero pay. Two weeks of unpaid vacation drops your annual by 2 × hours × hourly. At $25/hr × 40 hours, that's $2,000 less per year per week off.
If you're trying to compare an hourly job to a salaried one, this is where the comparison gets honest. A salaried job at $50,000 with three weeks of PTO is genuinely worth more than an hourly job at $25/hr × 40 hours with no PTO — even though the formula says they're both $52,000. The hourly worker who takes any time off ends up with less.
Going from hourly to salary (or back)
Job offers sometimes give you a choice — or a switch. Three things to look at when you compare:
- The base annual. Hourly × hours × 52 vs. the salary number. This is the obvious one.
- Time off. Salaried jobs usually include PTO and paid holidays as part of the package. Hourly jobs sometimes do, sometimes don't. If hourly doesn't, subtract your expected unpaid weeks from the annual gross.
- Overtime. Most hourly workers get overtime pay (1.5× rate) for hours over 40 per week. Most salaried workers don't, even if they work 50-hour weeks. If you regularly work overtime, an hourly job at the same base rate often pays more in practice.
The Compare mode in our calculator helps with the salary-side math. Plug in your two scenarios — current rate and new rate — and see the take-home side by side. It won't account for the PTO and overtime differences, but it'll get you the federal-tax-side of the comparison clean.
Common questions
Should I include overtime in the calculation?
What about pay raises?
What if my hours vary week to week?
What about state tax?
What if I'm a contractor (1099) instead of an employee (W-2)?
Why is biweekly different from "twice a month"?
One more thing
Once you know your annual number, the next thing most people want is the take-home. The calculator handles that in about two minutes — and if you're starting a new job at a new hourly rate, it's worth filling out a fresh W-4 to make sure your withholding matches.
The W-4 Easy Guide is the tool we built for that.