Hourly ↔ Salary Pay Guide: Clear Conversions, Fresh Examples, and Real-World Trade-Offs

Hourly to Salary (and Back): Quick Conversion Guide

Table of Contents

1. Hourly vs. Salary: What Really Sets Them Apart?

Factor	Hourly (Non-Exempt)	Salary (Exempt*)
Pay Basis	Paid for every hour worked	Fixed amount each pay period
Overtime	1.5× rate ≥ 40 hrs/wk	None if exempt criteria met
Schedule Control	Often flexible, hours tracked	May exceed 40 hrs, project-based
Benefits	Varies; sometimes limited	Typically broader (health, PTO)

Key takeaway: Hourly pay rewards additional hours with overtime; salary offers income stability and, in many cases, a richer benefits stack.

2. How to Convert Hourly Pay to an Annual Salary

Formula

Hourly Rate × Hours per Week × 52 weeks = Annual Salary

Example

If you earn $22/hour and work a standard 40-hour week:

$22 × 40 × 52 = $45,760 per year

Pro Tip: If you log overtime, multiply your average weekly hours (regular + OT) by 52 for a truer annual snapshot.

3. How to Calculate Your Hourly Rate from a Salary

Formula

Annual Salary ÷ Total Hours Worked in a Year = Hourly Rate

For most full-time U.S. roles:
Total Hours = 40 hours × 52 weeks = 2,080 hours

Example

A salary of $68,000 translates to:
$68,000 ÷ 2,080 = $32.69/hour

Working fewer or extra hours? Swap in your actual yearly total for pinpoint accuracy.

4. 2024 FLSA Update: New Overtime Thresholds to Know

The U.S. Department of Labor raised the minimum weekly salary for exempt employees. If a salaried employee now earns below the new threshold, they’re entitled to overtime unless they fit a narrow list of duty-based exemptions. Check your state rules—some set even higher salary floors or stricter overtime triggers.

5. Salary vs. Hourly—Which One Fits Your Life?

Choose Salary if you want…

Steady paychecks that simplify budgeting.
Comprehensive benefits like employer-sponsored health insurance or retirement matches.
Career-track roles with long-term projects vs. shift-based work.

Choose Hourly if you value…

Paid overtime when workloads spike.
More scheduling flexibility—ideal for side hustles, classes, or caregiving.
Transparency: you’re paid for every minute logged.

6. Quick-Reference Conversion Chart

Hourly Rate	Annual Salary
$18	$37,440
$20	$41,600
$22	$45,760
$25	$52,000
$30	$62,400
$40	$83,200

Note: Figures assume a 40-hour week and 52 paid weeks per year. Actual take-home pay will be lower after taxes, benefits, and other deductions.

Cut Payroll Complexity with LanteriaHR

Whether your workforce is salaried, hourly, or a hybrid of both, LanteriaHR unifies HR, time tracking, and payroll so conversions—and paychecks—are precise every time.

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