Hourly vs Salary: How to Compare Job Offers

You're holding two job offers. One says $30 an hour. The other says $62,000 a year. To compare them you need them in the same units — and once you do the headline numbers turn out to be nearly a tie. But the headline number almost never decides which offer is actually better. Overtime eligibility, health benefits, paid time off, and your real take-home pay can swing the comparison by thousands of dollars in either direction.

This guide shows you how to convert between hourly and salary using the standard 2,080-hour basis, how the federal overtime rules (FLSA exempt vs. non-exempt) change the math, and how to run a true apples-to-apples comparison. We'll finish with a fully worked example pitting $30/hour against a $62,000 salary so you can see exactly where one pulls ahead.

The 2,080-Hour Rule: Converting Hourly to Salary

The bridge between an hourly wage and an annual salary is one number: 2,080 hours. That's the standard full-time work year — 40 hours per week × 52 weeks. Memorize it and the conversions become quick mental math.

• Hourly to annual salary: hourly rate × 2,080. So $30 × 2,080 = $62,400 per year.
• Salary to hourly: annual salary ÷ 2,080. So $62,000 ÷ 2,080 = $29.81 per hour.

Right away you can see our two offers are essentially identical on the surface: $30/hour equals $62,400 a year, just $400 more than the $62,000 salary. If the headline number were all that mattered, you'd flip a coin. Our Hourly to Salary Calculator and Salary to Hourly Calculator do this conversion instantly, including for part-time schedules, but the 2,080 shortcut is worth keeping in your head for the back-of-the-napkin version.

One caveat: 2,080 assumes you take zero unpaid weeks off. A salaried employee with three weeks of paid vacation still earns the full salary while working roughly 2,000 actual hours, which quietly raises their effective hourly rate. An hourly worker who takes three unpaid weeks only logs about 1,960 hours and is paid for exactly those. Hold that thought — paid time off is one of the biggest hidden levers in this comparison.

Overtime: The FLSA Exempt vs. Non-Exempt Divide

The single biggest structural difference between hourly and salaried jobs is overtime eligibility, and it's governed by the federal Fair Labor Standards Act (FLSA). Workers fall into two buckets:

• Non-exempt employees must be paid overtime — at least 1.5× their regular rate for every hour worked beyond 40 in a workweek. Most hourly workers are non-exempt.
• Exempt employees are not entitled to overtime, no matter how many hours they work. To be exempt, a job generally must be paid on a salary basis, meet a minimum salary threshold, and pass a duties test (executive, administrative, professional, and similar roles).

This is why "hourly" and "salary" aren't just two ways of writing the same paycheck. A non-exempt hourly worker who regularly logs 45 hours a week is earning time-and-a-half on those extra 5 hours — a meaningful raise the salaried offer may not match. At $30/hour, five overtime hours a week add $45/hour × 5 = $225 weekly, or roughly $11,700 a year on top of base. An exempt salaried employee working those same 45 hours earns nothing extra for the overtime.

The flip side: salaried roles often come with more flexibility, more predictable income, and stronger benefits, and they don't dock your pay when work is slow and you put in only 35 hours. Before you compare offers, find out whether the hourly role is non-exempt (and whether overtime is actually available and expected) and whether the salaried role is exempt.

Why the Headline Number Doesn't Decide It

Two offers can have nearly identical gross pay and still be thousands of dollars apart in real value. The factors that actually move the needle are rarely printed in the big font at the top of the offer letter:

• Health insurance: An employer covering 80% of a family premium might be contributing $12,000–$18,000 a year of value that never shows up in your salary. A bare-bones plan can cost you that much out of pocket.
• Retirement match: A 401(k) match of 4% on a $62,000 salary is $2,480 a year in free money. The 2025 employee contribution limit is $23,500, so there's plenty of room to capture a full match.
• Paid time off: Vacation, sick days, and holidays are paid hours you don't work. Three weeks of PTO is worth about 6% of salary.
• Overtime potential: For non-exempt roles, regular overtime can add five figures, as we saw above.
• Bonuses and equity: Often taxed as supplemental wages at a flat 22% federal withholding rate, separate from your regular paycheck.
• Take-home pay: Two states, two filing situations, and two benefit elections can produce very different net pay from the same gross.

The job offer that wins on the headline can easily lose once you add a generous health plan, a retirement match, and an extra week of PTO on the other side.

Comparing Take-Home, Not Gross

The number that actually hits your bank account is take-home pay — gross minus pre-tax deductions, FICA, and income taxes. Comparing offers on gross alone can mislead you, because benefit elections and location change the net dramatically.

A quick refresher on what comes out of every paycheck in 2025:

• FICA: 7.65% total — 6.2% Social Security up to the $176,100 wage base, plus 1.45% Medicare on all wages. Neither of our example salaries comes close to the Social Security cap, so the full 7.65% applies.
• Federal income tax: Calculated after the 2025 standard deduction of $15,750 (single) or $31,500 (married filing jointly), using progressive brackets — so your effective rate is well below your top bracket.
• State income tax: Zero in nine states; several percent elsewhere.
• Pre-tax deductions: Traditional 401(k) (up to $23,500), HSA, and health premiums lower your taxable wages. A separate IRA can hold up to $7,000 in 2025, though that's usually handled at tax time, not via payroll.

Run both offers through the Take-Home Pay Calculator with their real benefit elections and your state, and compare the net figures. That's the honest comparison. A salary that's $2,000 lower on paper but comes with a richer pre-tax health plan and a bigger 401(k) match can easily out-net the higher number.

Worked Example: $30/Hour vs. $62,000 Salary

Let's compare two concrete offers for a single filer in a state with a flat 5% income tax. Offer A is hourly and non-exempt: $30/hour, no benefits, but eligible for overtime. Offer B is salaried and exempt: $62,000/year, with an employer-paid health plan and a 401(k) match. We'll look at three scenarios.

Scenario 1 — Straight 40-hour weeks, no benefits factored. Offer A: $30 × 2,080 = $62,400 gross. Offer B: $62,000 gross. Offer A wins by a razor-thin $400.

Scenario 2 — Offer A works 45 hours a week (5 hours overtime). Regular pay: $30 × 2,080 = $62,400. Overtime: 5 hours × 52 weeks × ($30 × 1.5 = $45) = $11,700. Offer A gross jumps to $74,100. If overtime is real and reliable, hourly pulls clearly ahead.

Scenario 3 — Add benefits to Offer B. Suppose Offer B includes a health plan worth $9,000/year in employer premiums and a 4% 401(k) match ($2,480) — about $11,480 of value the hourly offer doesn't provide. Now compare total compensation at a straight 40 hours:

Once benefits are counted, Offer B is worth roughly $11,080 more per year at a standard 40-hour week — despite a lower headline number. But notice how it flips in Scenario 2: if the hourly role reliably delivers 5 overtime hours a week ($11,700), Offer A's total ($74,100 plus whatever benefits you can buy on your own) closes most of the gap.

The lesson is that no offer is universally better. The hourly job wins if overtime is dependable and you don't need the employer's benefits. The salaried job wins if you value the health coverage, the retirement match, paid vacation, and income stability. Plug your real numbers into the Hourly to Salary Calculator to line the offers up, then the Take-Home Pay Calculator to compare what each actually nets.

Don't Forget Paid Time Off and Effective Hourly Rate

PTO is the most overlooked piece of the puzzle. A salaried employee earning $62,000 with three weeks of paid vacation is paid for 2,080 hours but works only about 1,960. Their effective hourly rate is $62,000 ÷ 1,960 = $31.63/hour — higher than the $30 hourly offer, before benefits even enter the picture.

To compare fairly, convert both offers to an effective hourly rate based on hours actually worked:

• Salaried: annual salary ÷ (2,080 − paid-leave hours). Paid time off raises this rate because you're paid for hours you don't work.
• Hourly: your stated rate, since unpaid time off simply means fewer paid hours — your per-hour rate doesn't change, but your annual total falls.

This is why a salaried offer that looks slightly lower can be the better deal once paid leave is baked in. The Salary to Hourly Calculator can help you find an effective rate by adjusting the hours figure to reflect your real schedule.

A Checklist for Comparing Any Two Offers

• Convert to the same units. Use the 2,080-hour rule (or the calculators) to put both offers in annual and hourly terms.
• Confirm overtime status. Is the hourly role non-exempt with real overtime available? Is the salaried role exempt?
• Price the benefits. Add the employer's health contribution, 401(k) match, and any HSA or other perks to total compensation.
• Count the PTO. Translate vacation, sick, and holiday days into a dollar value (and an effective hourly rate).
• Compare take-home, not gross. Run both through a take-home calculator with your state and benefit elections.
• Weigh stability vs. upside. Salary offers predictability; hourly offers overtime upside but variable hours.

The Bottom Line

Comparing an hourly offer to a salaried one starts with the 2,080-hour conversion — $30/hour is $62,400 a year, almost the same as a $62,000 salary. But the conversion is only the opening move. Overtime eligibility under the FLSA, employer-paid health insurance, a 401(k) match, paid time off, and your actual take-home pay are what separate a good offer from a great one. In our example, the hourly job won on overtime, while the salaried job won once benefits and PTO were counted. Convert both with the Hourly to Salary Calculator and Salary to Hourly Calculator, then compare net pay with the Take-Home Pay Calculator, and you'll choose the offer that's genuinely better for you — not just the one with the bigger number on the page. This article is for informational purposes only and is not professional financial or tax advice; consult a licensed advisor for guidance on your specific situation.