Convert between annual salary and hourly rate. See monthly, biweekly, and weekly breakdowns.
When comparing a salaried offer to an hourly rate, the headline numbers rarely tell the full story. Benefits are often the biggest equalizer: health insurance, employer 401(k) matching, paid time off, and disability insurance can add $10,000-$25,000 of value on top of base salary at larger companies. Hourly workers, especially contractors, often pay for these themselves.
Overtime eligibility is another key difference. Hourly non-exempt workers under the Fair Labor Standards Act are entitled to 1.5x their regular rate for hours over 40 per week. Salaried exempt employees receive no overtime regardless of hours worked. In roles that regularly require 45-50 hours per week, this difference is financially significant.
Job security and income predictability also differ. Salaried employees typically receive a consistent paycheck regardless of slow business periods. Part-time hourly workers may experience variable hours and income. On the other hand, in-demand contractors can often negotiate higher rates precisely because they forgo stability.
Freelancers and independent contractors generally need to earn 30-50% more than an equivalent salaried employee to achieve the same after-tax income. The reasons: self-employment tax (15.3% vs 7.65% for employees), no employer benefits, unpaid time for vacation and sick days, administrative overhead, and income variability.
A useful benchmark: multiply the equivalent salary by 1.4 and divide by 2,000 working hours to find a fair contractor hourly rate. A $75,000 salary equivalent becomes $75,000 × 1.4 / 2,000 = $52.50/hour. Anything below this and you're likely earning less than a salaried employee after all costs.