Salary Calculator

The 2,080-hour year, and why it's a useful fiction

US employment math typically uses 2,080 hours per year— that's 40 hours/week × 52 weeks. It's the basis for most hourly-to-annual conversions in payroll, government statistics, and offer letters. The calculator above defaults to it.

But it's a fiction in two ways. First, it ignores time off — most US employees with paid time off actually work fewer than 2,080 hours and earn the same salary (PTO is paid). Second, the federal government uses 2,087 hours for federal-employee pay calculations because the calendar doesn't divide perfectly into 40-hour weeks across years (52 weeks × 7 days = 364, not 365.25). For most personal calculations, 2,080 is fine.

Hourly to annual: the conversion that matters

The simple formula: hourly rate × hours per week × weeks worked = annual gross. Examples:

• $15/hour × 40 × 52 = $31,200/year (typical entry-level minimum-wage-ish)
• $25/hour × 40 × 52 = $52,000/year (US median individual income)
• $35/hour × 40 × 52 = $72,800/year (skilled professional)
• $50/hour × 40 × 52 = $104,000/year (six-figure threshold)
• $75/hour × 40 × 52 = $156,000/year (senior tech, consulting)
• $100/hour × 40 × 52 = $208,000/year (top contractor / specialized fields)

For unpaid time off (e.g., 2 weeks of unpaid leave), reduce weeks to 50. For overtime workers, increase hours/week — but remember overtime pays 1.5× for non-exempt employees, so a base $25/hr with 10 OT hours/week earns $25 × 40 + $37.50 × 10 = $1,375/week instead of $1,000.

Pay frequency: biweekly vs semi-monthly (they're different)

One of the most-confused topics in personal finance:

• Biweekly — every other week, on the same weekday. 26 paychecks/year — and in some calendar years, 27. The “extra paycheck” is a real budgeting opportunity.
• Semi-monthly — twice a month, on fixed dates (e.g., 15th and last day). Always 24 paychecks/year.

On a $52,000/year salary: biweekly = $2,000/check (or ~$1,925/check during 27-paycheck years), semi-monthly = $2,167/check. Same total annual pay, different cash-flow patterns.

Gross vs net: where 25–40% of your salary disappears

The calculator on this page shows grossfigures. Your real take-home (net) is gross minus federal income tax, state income tax (in 41 states), FICA (7.65%), and any pre-tax deductions you've elected.

For a single filer earning $75,000 in California with 5% 401(k):

• Gross: $75,000
• Pre-tax 401(k): −$3,750
• Federal income tax: ~$8,200
• California state tax: ~$3,200
• FICA (7.65%): ~$5,738
• Net take-home: ~$54,100/year

That's roughly 28% disappeared between gross and net. Use our Paycheck Calculator with your state for an accurate net figure. The same salary in a no-state-tax state (Texas, Florida) keeps ~$3,000–$5,000 more per year, but cost-of-living differences usually offset it.

Hourly vs salaried: the legal distinction matters

Under the Fair Labor Standards Act (FLSA), employees are classified as either exempt (typically salaried) or non-exempt(typically hourly):

• Non-exempt employees must be paid at least minimum wage and 1.5× for hours over 40/week. Hourly workers are typically non-exempt; some salaried workers are too.
• Exempt employees aren't entitled to overtime — they're paid a fixed salary regardless of hours worked. To be exempt, the role must meet duties tests (executive, administrative, professional, computer, outside sales) AND a salary threshold (~$58,656/year as of 2025; this updates).

Misclassification is a common employer mistake — being “salaried” doesn't automatically make you exempt. If you're a salaried employee working 60+ hours/week and the duties test doesn't fit your role, you may be entitled to back overtime pay. Department of Labor wage-and-hour office can advise.

Negotiating: convert before you respond

When negotiating, always convert offered numbers to a comparable basis. A $40/hour contractor offer is not the same as $83,200 W-2 — contractors pay both halves of FICA (15.3%), buy their own health insurance, and have no PTO. The rough rule: multiply contract hourly by 1.3–1.5 to compare to W-2.

Conversely, “$80,000/year” is $38.46/hour at 2,080 hours — but if the job actually requires 50 hours/week of work (common in salaried roles), the effective hourly is $30.77. Asking about expected hours separates good offers from disguised pay cuts.

Geographic pay arbitrage

Salaries vary 30–80% by US metro for the same role. A software engineer earning $200,000 in San Francisco might earn $130,000 in Austin or $100,000 in Cleveland — but cost of living typically tracks the difference. Use cost-of-living comparisons (BestPlaces, Numbeo) when evaluating relocation offers, and check the Paycheck Calculator for state-specific take-home after taxes.