Hourly Rate vs Salary Calculator

How the two sides are annualised

Annualising an hourly rate means choosing a number of weeks. Moving from 52 weeks to 48 cuts the hourly side by four fifty-seconds, or 7.7%, which is 3,200 on the sample figures. The calculator annualises at the weeks entered rather than assuming a full year, since hourly work is usually unpaid for the time it does not cover.

What counts as benefits value

The benefits figure is the one input the calculator cannot check for you. What belongs in it depends on the contract and on the country: statutory paid leave runs to several weeks across much of Europe and to none at all in the United States, and employer retirement contributions range from mandatory to absent. The calculator takes a single annual figure rather than modelling any component, so the comparison is only as good as the contract it was read from.

What this calculator does

It annualises the hourly side at the rate, hours and weeks entered, adds salary and benefits for the salaried side, and reports the absolute difference along with which side is larger. Both figures are pre-tax and exclude employer payroll taxes.

Sample figures

At 20 an hour, 40 hours a week and 48 weeks a year, against a 38,000 salary carrying 5,000 of benefits, the hourly side annualises to 38,400 and the salaried package totals 43,000, a difference of 4,600 in favour of the salaried role, and a break-even hourly rate of 22.40. These are sample figures for illustration rather than a suggested set.

What moves the number most

The headline is the absolute difference between (salary + benefits) and rate × hours × weeks, so the two sides carry weight differently. Salary and benefits enter additively; rate, hours and weeks enter multiplicatively and are interchangeable, so a 1% move on any of the three shifts the hourly side by the same amount. The What-If ranker keeps whichever interchangeable lever it reaches first and drops the exact duplicates, which is why Hours per Week has no card of its own while Hourly Rate and Weeks Worked both do, showing identical figures. How large any move looks against the headline depends on the headline itself: a 1% change shows up as that input's own contribution divided by the difference, so it is amplified where the contribution exceeds the difference and damped where it does not. On the sample figures the hourly side and the salary each move the result by about 8.3% while benefits move it by 1.1%. The same benefits lever on a package split 42 to 1 rather than 38 to 5, for the identical difference, is 0.2%.

The formula behind this

Hourly annualised is rate multiplied by hours multiplied by weeks. The salaried package is salary plus the benefits figure. The headline is the absolute difference between the two, and the break-even hourly rate is that package divided by the same hours and weeks the hourly side uses.