Hourly Rate Calculator

The most common salary-to-hourly conversion ignores vacation time and overstates your worked hours.

The 2,080-hour figure (52 weeks × 40 hours) is widely used, but it treats every week as a working week. If you receive 4 weeks of paid vacation, your actual worked hours are 1,920. Dividing the same salary by a smaller denominator produces a higher true hourly rate.

This matters in several practical contexts. When negotiating a contract rate, using 2,080 hours undervalues your time. When comparing your salaried role against a quoted hourly freelance rate, using the wrong base causes you to misread the comparison by 8–12%. And when calculating overtime or project estimates, using the standard shortcut introduces systematic error.

Common annual salaries converted at 2, 3, and 4 weeks' vacation to show how PTO affects the true rate.

Employers pay significantly more than base salary. Understanding this helps when setting freelance rates.

For every $100 of gross salary, a US employer typically pays an additional $15–40 in employment costs: employer Social Security and Medicare taxes (~7.65%), unemployment insurance (~0.6–6%), workers' compensation, and benefits (health insurance, 401k match, paid leave accrual). The total employer cost per employee is commonly 1.25–1.4× the gross salary.

This means a $60,000 salaried employee costs the employer $75,000–$84,000 per year all-in. A freelancer charging $50/hr for 1,920 hours earns $96,000 in revenue — but after self-employment taxes (~15.3%), health insurance (~$6,000–12,000), and unpaid downtime (admin, sales, gaps between contracts), the true net may be comparable to a $60–70K salary. The freelance premium is real but far smaller than the gross rate comparison suggests.