Hourly To Salary Calculator
Convert hourly wage to equivalent annual salary (and vice-versa) accounting for vacation, holidays, and taxes.
Equivalents Breakdown
Frequently Asked Questions
Why is the hourly-to-salary conversion more than just hourly rate times 2,000?
Hourly rate times 2,080 assumes you work 40 hours every single week with no holidays, sick days, or vacation. In reality, most employees work closer to 1,880 to 1,920 hours due to paid time off. For contractors, time off is unpaid, which significantly reduces annualized earnings.
What is the Contractor Premium?
Contractors must cover their own health insurance, retirement contributions, self-employment taxes (the employer's 7.65% share), and business software. To earn the equivalent take-home of a W-2 salary, a contractor must charge a premium of 30% to 50% above their W-2 hourly equivalent.
How does the Self-Employment tax affect my rate conversion?
In the United States, self-employed contractors pay a 15.3% self-employment tax, whereas W-2 employees only pay 7.65% (the employer pays the other half). This calculator factors in this tax burden to give you a true side-by-side equivalent comparison.
Convert Between Hourly Rates and Annual Salaries Accurately
Whether you are evaluating a full-time job offer, negotiating a freelance contract, or calculating employee costs, simple multiplication fails to represent true financial equivalence. The Hourly to Salary Calculator factors in unpaid holidays, sick days, working hours per week, and the 1099 contractor tax burden to construct a side-by-side financial comparison.
Calculating W-2 Employee vs. 1099 Contractor Equivalence
If you transition from a full-time salary to contract work, you cannot simply divide your salary by 2,000 to find your hourly rate. Doing so ignores the cost of self-employment tax, lack of paid vacation, and zero health insurance benefits. Use this calculator to model the exact contractor premium required to keep your net take-home compensation equal.