Salary vs Hourly: What Your Pay Is Actually Worth
Convert salary to hourly (and back) the right way — including unpaid leave, overtime and the tax reality.
Marcus Webb
Tools & Productivity Writer
Comparing a 62,000 salary against a 28/hour contract is not a one-line division. The numbers only mean something once you account for hours worked, paid leave and overtime. Here is the math that matters.
The standard conversion
The common rule of thumb — salary ÷ 2,000 = hourly — assumes 40 hours × 50 weeks. That ignores two weeks of paid leave, so a cleaner estimate is salary ÷ (40 × 52) = hourly. A 62,000 salary is about 29.80/hour on that basis.
| Working year | Hours | 62,000 as hourly |
|---|---|---|
| 40h × 52 weeks | 2,080 | 29.81 |
| 40h × 50 weeks (2 weeks unpaid) | 2,000 | 31.00 |
| 40h × 48 weeks (4 weeks unpaid) | 1,920 | 32.29 |
The contract premium
Hourly contracts have no paid leave, no sick pay and no employer pension contribution. A fair hourly rate needs a 15–30% premium over the equivalent salaried hourly figure. The 31.00 an hour from the table above should be compared to contract rates of 36–40/hour.
Overtime changes everything
At time-and-a-half, hours 41–48 on a 28/hour role pay 42/hour. If a role reliably offers overtime, the average hourly rate climbs quickly. Run the scenario with realistic overtime hours before comparing against a flat salary.
Add the value of benefits to the salary side: health cover, pension match and training budget can be worth 15–25% of base pay on top.
What is the correct way to convert salary to hourly?
Divide annual salary by actual annual hours worked. 2,080 (40×52) is the default; reduce it for unpaid leave.
Should I take a contract that pays more per hour?
Only if the 15–30% premium covers what you lose: leave, sick pay, pension and job security. Do the math on your specific situation.
Written by Marcus Webb
Marcus covers productivity, automation and everyday internet tools. He believes great tooling should feel invisible.
Tools used in this article
Percentage Calculator
PopularFind what X% of Y is, calculate percentage change and reverse percentages in seconds.
Split bills fairly — tip percentage, per-person totals.
Work out sale prices, savings and final totals — including tax.
Related articles
How Loan Interest Actually Works (With a Real Amortisation Example)
Why your monthly payment stays flat while the interest math changes every month — and how extra payments really help.
Small Business Budgeting: The Tools and Numbers That Matter
You do not need a spreadsheet PhD. Here is the budgeting stack that works for a bootstrapped business.
