Whether you are comparing a salaried offer to an hourly gig, pricing freelance work, or checking that your overtime is right, you need to translate an annual salary into an hourly rate. The math is simple, but the tax treatment of each dollar is where people get tripped up. Here is the complete picture for 2026.
The 2080-Hour Rule
A standard full-time schedule is 40 hours per week for 52 weeks, which equals 2,080 hours per year. So the baseline conversion is:
Hourly rate = Annual salary ÷ 2,080
Examples:
- $52,000 ÷ 2,080 = $25.00/hour
- $75,000 ÷ 2,080 = $36.06/hour
- $104,000 ÷ 2,080 = $50.00/hour
To go the other direction, multiply: $30/hour × 2,080 = $62,400/year.
Adjusting for Real Working Hours
The 2,080 figure assumes no unpaid time off. Two common adjustments:
- Paid time off is already included. If your salary covers two weeks of vacation, those hours are still paid, so 2,080 holds.
- Unpaid time off lowers your true hourly value. If you take two unpaid weeks, you actually work 2,000 hours, so a $75,000 salary is really $75,000 ÷ 2,000 = $37.50/hour of worked time.
For part-time roles, swap in your actual weekly hours: 25 hours/week × 52 = 1,300 hours, so $39,000 ÷ 1,300 = $30.00/hour.
How Overtime Changes the Picture
For non-exempt hourly workers, federal law requires time-and-a-half (1.5×) for hours over 40 in a week. At $30/hour, overtime pays $45/hour. Salaried employees classified as exempt generally do not receive overtime, which is why a salaried job that demands 50-hour weeks can have a lower effective hourly rate than it first appears: $75,000 across 50-hour weeks (2,600 hours) is only $28.85/hour.
How Each Dollar Is Taxed
Hourly and salaried pay are taxed identically — the IRS does not care how your wage is labeled. Every dollar of wages runs through the same withholding stack:
FICA (flat and automatic)
- Social Security: 6.2% on wages up to the 2026 wage base of $184,500.
- Medicare: 1.45% on all wages, plus an Additional Medicare Tax of 0.9% on wages above $200,000 (single) or $250,000 (married filing jointly).
Combined, that is 7.65% for most workers, withheld from gross pay before you ever see it.
Federal Income Tax Withholding
This is based on your Form W-4 and your marginal bracket, not a flat rate. It is progressive, so a raise pushes only the additional dollars into a higher bracket — not your whole paycheck.
State Tax (where applicable)
Nine states have no wage income tax; the rest withhold on top of FICA and federal tax.
A Full Take-Home Example
Take a $62,400 salary ($30/hour) for a single filer with no dependents, paid biweekly ($2,400 per gross paycheck):
- FICA: 7.65% of $2,400 = $183.60
- Federal withholding: roughly $215 at 2026 single-filer rates
- Net (before state tax): about $2,001 per paycheck
The same person paid hourly at $30 for 80 hours per pay period lands in exactly the same place — the labels differ, the tax does not. The difference only appears if the hourly worker logs overtime, which adds gross pay (taxed normally) that a salaried exempt worker would not receive.
Why Overtime Is Not “Taxed Higher”
A persistent myth says overtime is taxed at a higher rate. It is not. Overtime dollars are simply more dollars, so a big overtime week can briefly bump your withholding because payroll annualizes that paycheck. The actual tax owed is settled on your return, where overtime is ordinary wage income like everything else.
Bottom Line
Use 2,080 hours as your default conversion, adjust for unpaid time and overtime, and remember that the hourly-versus-salary label has no effect on your tax — only your total wages and your W-4 do. To see your exact hourly equivalent and the resulting take-home pay, run your numbers through the salary-to-hourly calculator and confirm the withholding with the paycheck calculator.