How the Conversion Works
Annual salary = hourly rate x hours per week x (52 weeks minus unpaid weeks off). Paid vacation days are included as working time since you still receive pay. Monthly = annual / 12. Bi-weekly = annual / 26. Weekly = annual / 52. Daily = hourly rate x hours per day (hours per week / 5 days).
Unpaid Days
Unpaid days off reduce your effective annual earnings. The calculator converts unpaid days to weeks (dividing by 5) and subtracts from the working weeks total, giving you an accurate effective annual rate.
Frequently Asked Questions
Multiply the hourly wage by the number of hours worked per week, then multiply by the number of weeks worked per year. At 40 hours per week and 52 weeks per year (no unpaid time off): annual salary = hourly rate x 40 x 52 = hourly rate x 2,080.
Paid vacation days do not change your annual salary because you are still paid for those days. However, if you have unpaid time off, it reduces your effective annual earnings. The calculator lets you enter paid vacation days and unpaid days separately so you can model both cases.
At a standard 40-hour week and 52 weeks per year: $60,000 / 2,080 hours = $28.85 per hour. This is the effective hourly rate for comparison purposes.
Hourly employees are paid for each hour worked and typically receive overtime pay (1.5x the hourly rate) for hours exceeding 40 per week under the FLSA. Salaried employees receive a fixed salary regardless of hours worked and may be exempt from overtime depending on their classification and salary level.
As a freelancer or 1099 contractor, you pay both the employee and employer portions of Social Security (12.4% total on first $176,100) and Medicare (2.9% total). When comparing a W2 salary to a 1099 rate, you need to account for this extra self-employment tax burden. The 1099 vs W2 Calculator on TheCalcHub handles this comparison.
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