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Converting an annual salary to an hourly rate (or vice versa) requires knowing your actual paid hours per year, not just assuming a flat "2,080 hours" (40 hours × 52 weeks). The more useful number for decision-making is often your real hourly wage — what you actually earn per hour once unpaid overtime, unpaid commute time, and work-related costs are factored in, which is frequently lower than the naive salary ÷ standard-hours calculation.

How it's calculated

Basic conversion: hourly rate = annual salary ÷ (hours per week × weeks worked per year). If you work a standard 40-hour week for 50 paid weeks (accounting for 2 weeks of unpaid or PTO-adjusted time), that's 2,000 hours — a $70,000 salary becomes $35/hour. But if you routinely work 50-hour weeks for that same salary, your real hourly rate drops to $70,000 ÷ 2,500 = $28/hour, a meaningful difference the standard conversion hides.

Why it matters

Comparing a salaried job offer to an hourly or contract one requires this real-rate conversion — a salaried role advertised as equivalent to "$40/hour" may actually pay closer to $30/hour once uncompensated overtime is counted, which matters enormously when weighing it against a straightforward hourly or 1099 contract role (see the W-2 vs 1099 calculator for the self-employment side of that comparison).

Common pitfalls

Using 2,080 hours (52 weeks × 40 hours, with zero vacation) as the default assumption overstates your denominator if you actually take PTO, since those are hours you're paid for without working. On the flip side, ignoring consistent unpaid overtime understates how many hours you're really trading for that salary — both distort the comparison unless you use your actual average hours worked.