Approximate Salary:
Table of Contents
From hourly wage to annual income
An hourly wage tells you what you earn for one hour of work; an annual salary tells you what you earn over a year. Converting between them sounds trivial, but the details — weeks worked, overtime eligibility, paid vs unpaid time off, taxes — substantially affect what either number actually means for your real take-home.
How the conversion is calculated
The basic formula assumes a standard work pattern:
Annual Salary = Hourly Wage × Hours per Week × Weeks per Year
Worked example using the calculator's defaults ($40/hour, 40 hours/week, 52 weeks/year):
- $40 × 40 × 52 = $83,200/year
This is your gross annual salary — before taxes, deductions, and benefits adjustments. Net (take-home) is typically 65–80% of gross depending on your tax bracket and state. So $83,200 gross often becomes $58,000–$66,000 in actual deposits.
The "52 weeks" assumption (and why it's often wrong)
The standard calculation assumes you work and get paid 52 weeks per year. In practice, this depends on your time-off structure:
- Paid time off included: 52 weeks is accurate. Your salary is the same whether or not you take vacation, holidays, or sick days — you're paid for them.
- Unpaid time off: use weeks actually worked. 2 weeks unpaid vacation + 1 week unpaid sick time = 49 weeks. At $40/hour, that's $78,400, not $83,200.
- Seasonal or contract work: use actual weeks engaged. A teacher working 36 weeks at $40/hour earns $57,600 from teaching alone — the "annual" figure depends on whether they work the remaining 16 weeks.
The calculator above defaults to 52 weeks. Adjust downward if your time off isn't paid — that's the more honest figure for comparing job offers.
Hourly vs salaried: the FLSA classification
The US Fair Labor Standards Act (FLSA) divides workers into two categories that affect overtime and minimum wage:
| Non-exempt (typically hourly) | Exempt (typically salaried) | |
|---|---|---|
| Overtime | Required (1.5× over 40 hrs/week) | Not required |
| Minimum wage | Federal $7.25/hr (states often higher) | Salary minimum currently $58,656/yr (2025) |
| Time tracking | Required by employer | Not required |
| Pay deduction for partial days | Yes (paid for hours worked) | No (full day's pay if any work done) |
| Typical roles | Retail, hospitality, manufacturing, junior office | Professional, executive, administrative |
Important: classification depends on job duties AND salary level, not just pay structure. An employer can't make a worker "salaried" just to avoid overtime if the duties don't meet exempt criteria. Misclassification is a common wage-theft pattern — check the DOL FLSA tests if you're unsure.
How overtime affects annual income
For non-exempt workers, overtime can substantially boost annual income. At $20/hour with 5 hours of weekly overtime:
- Regular: $20 × 40 × 52 = $41,600
- Overtime: $30 × 5 × 52 = $7,800
- Total: $49,400 (an 18.7% boost)
Beyond 40 hours weekly, federal law requires 1.5× pay. California adds daily overtime requirements: time-and-a-half over 8 hours and double-time over 12 hours in a single day. A few states (e.g., Alaska, Colorado, Nevada) have variations. The DOL's FLSA reference is the authoritative source.
Gross salary vs net (take-home) pay
The calculator returns gross salary — what your employer pays you. What lands in your bank account is meaningfully less. Typical deductions on an $83,200 gross salary in 2025:
- Federal income tax: roughly $11,000 (varies by filing status and deductions)
- Social Security: 6.2% of wages up to $176,100 = $5,158
- Medicare: 1.45% of all wages = $1,206
- State income tax: $0 (FL, TX, WA, NV, etc.) to $9,000+ (CA, NY at higher rates)
- Health insurance: typically $1,500–$8,000 employee contribution
- Retirement (401k): voluntary, but reduces taxable income
Net result: $83,200 gross typically becomes $55,000–$68,000 take-home depending on state and personal choices. Use a paycheck calculator for state-specific estimates.
$83,200 means different things in different places
A given annual salary supports very different lifestyles depending on local cost of living. Rough comparison: $83,200 lifestyle equivalence by US metro:
- $83,200 in San Francisco ≈ $40,000–$48,000 lifestyle in Indianapolis
- $83,200 in New York ≈ $50,000–$58,000 lifestyle in Cleveland
- $83,200 in Austin ≈ $63,000–$70,000 lifestyle in St. Louis
Adjusted-cost-of-living comparisons are important for job offer evaluation, especially with the rise of remote work where geography can be decoupled from employer. Tools like the BLS Consumer Expenditure Survey and BEA Regional Price Parities provide the data.
Sources & references
- US Department of Labor — Fair Labor Standards Act — authoritative source on minimum wage, overtime, and exempt classification.
- Bureau of Labor Statistics — Occupational Employment Statistics — median wages by occupation and metro area.
- IRS — Tax Withholding — how federal income tax withholding works on paychecks.
- BEA Regional Price Parities — cost-of-living adjustments across US metros.
FAQs
Assuming a standard 40-hour, 52-week year: $50,000 = $24.04/hour; $75,000 = $36.06/hour; $100,000 = $48.08/hour. If you take 2 weeks of unpaid vacation, divide by 50 weeks instead: $50K becomes $25/hour, $100K becomes $50/hour. Paid vacation doesn't change the calculation — you're paid for those weeks too.
Taxes and deductions. A $40/hour wage at 40 hours/week = $1,600 gross weekly — but typical take-home after federal income tax, Social Security (6.2%), Medicare (1.45%), state income tax (0–13%), and health insurance contributions runs about 65–80% of gross. So $1,600 gross often becomes $1,200–$1,300 in your bank account. The gap is biggest in high-tax states (California, New York) and smallest in no-income-tax states (Florida, Texas, Washington, Nevada).
Hourly (non-exempt under FLSA): paid for every hour worked, must receive overtime (typically time-and-a-half) for hours over 40 per week, subject to minimum wage laws, time tracking required. Salaried (exempt under FLSA): fixed annual pay regardless of hours worked, no overtime pay (the salary is meant to cover all hours), must meet specific job duties AND earn above a salary threshold (currently $58,656/year as of 2025) to qualify. Salaried employees often have more job stability but can effectively earn less per hour if they routinely work 50+ hour weeks.
Under federal FLSA rules, non-exempt employees must be paid 1.5× their regular rate for hours worked over 40 in a workweek. So at $20/hour, the overtime rate is $30/hour. Some states have stricter rules — California requires daily overtime over 8 hours, plus double-time over 12 hours. The regular rate includes most non-discretionary bonuses, not just the base wage. Overtime can substantially boost annual income: 40 hours regular + 10 hours overtime at $20/hour = $1,100/week vs $800 base.
Depends on whether your time off is paid:
- 52 weeks — if all your time off is paid (typical salaried employees with paid vacation and holidays)
- 50 weeks — if you take 2 unpaid weeks (common for hourly workers without paid vacation)
- 48 weeks — conservative estimate accounting for unpaid time off and sick days