Hourly vs. Salary: How to Compare Job Offers
Convert any wage to a yearly number, then compare what really matters: overtime, benefits, paid time off and take-home pay.
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- By the PaydayMath team · how we work
One offer says $26 an hour. Another says $52,000 a year. Which pays more? At first glance they are the same, but the answer depends on how many hours you will really work, whether you get overtime and what benefits come with each job. Here is how to compare them properly.
Step 1: Put both on the same yearly number
Hourly to yearly: hourly rate × hours per week × 52. A full-time year is 40 × 52 = 2,080 hours. Quick mental shortcut: double the hourly rate and add three zeros ($26 an hour ≈ $52,000). Yearly to hourly: divide the salary by 2,080.
| Hourly | Weekly (40 h) | Monthly | Yearly |
|---|---|---|---|
| $15 | $600 | $2,600 | $31,200 |
| $20 | $800 | $3,467 | $41,600 |
| $25 | $1,000 | $4,333 | $52,000 |
| $30 | $1,200 | $5,200 | $62,400 |
| $40 | $1,600 | $6,933 | $83,200 |
| $50 | $2,000 | $8,667 | $104,000 |
Step 2: Count the hours you will really work
A salary looks better than it is if the job expects 50-hour weeks. $52,000 for 50 hours a week is really $20 an hour. The hourly job at $26 pays for every hour, and hours over 40 earn time-and-a-half: five extra hours a week add $195 a week, or about $10,000 a year.
Ask in the interview how many hours a typical week has, and whether the salaried role is exempt from overtime. Salaried workers earning below the exemption threshold, or doing work that does not meet the exemption tests, are still owed overtime. Our guide on how overtime works explains the rules.
Step 3: Add the value of benefits
Benefits often make a bigger difference than a dollar or two per hour:
- Health insurance: compare what you would pay per paycheck. A plan where the employer pays most of the premium can be worth several thousand dollars a year.
- Retirement match: a 4% 401(k) match on $52,000 is $2,080 a year of extra pay.
- Paid time off: hourly jobs sometimes pay only for hours worked. Two weeks of unpaid vacation on a $26 job costs $2,080.
- Paid holidays, bonuses and shift differentials: ask whether they are guaranteed or discretionary.
Step 4: Compare take-home pay
Taxes do not depend on whether you are hourly or salaried; they depend on how much you earn and where you live. Moving from a state with no income tax, such as Texas or Florida, to one with a high rate can change your take-home pay by several thousand dollars at the same salary. As a rough guide, here is what a full-time single filer keeps in a state with no income tax:
| Hourly | Yearly gross | Yearly take-home (est.) |
|---|---|---|
| $15 | $31,200 | $27,249 |
| $20 | $41,600 | $35,606 |
| $25 | $52,000 | $43,962 |
| $30 | $62,400 | $52,318 |
| $40 | $83,200 | $67,361 |
| $50 | $104,000 | $81,994 |
Use the hourly to salary calculator with your own hours and state to get your number.
Pros and cons at a glance
| Hourly | Salary | |
|---|---|---|
| Overtime | Always paid if non-exempt | Often not paid (exempt) |
| Paycheck size | Changes with hours | Same every period |
| Long weeks | Earn more | Effective hourly rate drops |
| Short weeks | Earn less | Pay usually stays the same |
| Benefits | Vary, sometimes fewer | More often included |
The bottom line
Convert both offers to an effective hourly rate based on the hours you will actually work, then add the yearly value of benefits. The higher total, not the higher headline number, is the better offer.
More guides
- Why Is My Bonus Taxed So High?
- How Overtime Pay Works in the U.S.
- How to Read Your Pay Stub
- How to Calculate Hours Worked for Payroll
This guide is general information about U.S. payroll rules, not tax or legal advice. Rules change and your situation may differ; check with your employer, your state labor department or a tax professional.