How do you calculate yearly salary to hourly

Estimate the after-tax pay for hourly employees by entering the following information into a hourly paycheck calculator:

This powerful tool can account for up to six different hourly rates and works in all 50 states. See frequently asked questions about calculating hourly pay.

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Hourly Paycheck Calculator FAQs

How do I calculate hourly rate?

First, determine the total number of hours worked by multiplying the hours per week by the number of weeks in a year (52). Next, divide this number from the annual salary. For example, if an employee has a salary of $50,000 and works 40 hours per week, the hourly rate is $50,000/2,080 (40 x 52) = $24.04.

How do I calculate taxes from paycheck?

Calculate the sum of all assessed taxes, including Social Security, Medicare and federal and state withholding information found on a W-4. Divide this number by the gross pay to determine the percentage of taxes taken out of a paycheck.

How do I calculate salary to hourly wage?

Multiply the hourly wage by the number of hours worked per week. Then, multiply that number by the total number of weeks in a year (52). For example, if an employee makes $25 per hour and works 40 hours per week, the annual salary is 25 x 40 x 52 = $52,000.

Important Note on the Hourly Paycheck Calculator: The calculator on this page is provided through the ADP Employer Resource Center and is designed to provide general guidance and estimates. It should not be relied upon to calculate exact taxes, payroll or other financial data. These calculators are not intended to provide tax or legal advice and do not represent any ADP service or solution. You should refer to a professional advisor or accountant regarding any specific requirements or concerns.

You can also determine the hourly wage of an employee by dividing their annual salary by the number of hours they work in a year. Based on a standard work week of 40 hours, a full-time employee works 2,080 hours per year (40 hours a week x 52 weeks a year). So if an employee earns $40,000 annually working 40 hours a week, they make about $19.23 an hour (40,000 divided by 2,080).

If you make $55,000 per year, your hourly salary would be $26.44. This result is obtained by multiplying your base salary by the amount of hours, week, and months you work in a year, assuming you work 40 hours a week.

Sometimes, being an employer feels like you’re doing nonstop math. And if you want to know how to convert salary to hourly rate for employees, it’s time to whip out those calculators.

So, when would you need to convert a salary to hourly wages? You may want to know how an employee’s salary compares to employees who receive hourly wages. Or, you might need to know how to calculate overtime for salaried employees. 

Regardless of your reason, we’ve got the formulas you need to convert salary to hourly wages below.

How to convert salary to hourly

Below are two hourly wage calculation methods for salary employees. The first salary to hourly formula is shorter and easier to calculate. The second formula involves more calculations.

However, don’t automatically use the first formula to avoid doing extra math. Both methods come with a downfall, which is explained in each section.

Salary-to-hourly conversion: Method 1

With this salary-to-hourly conversion, you will calculate the hourly rate based on a standard 40-hour workweek. If a standard workweek at your business is less than 40 hours, use that number instead of 40 in the equation.

Here is the basic salary-to-hourly formula for this method:

(Annual salary ÷ 52) ÷ 40 = Hourly Rate

First, divide the employee’s annual salary by 52 weeks (the number of weeks in a year).

$31,200 ÷ 52 = $600 per week

Divide the weekly wages by 40 hours.

$600 ÷ 40 = $15 per hour

In this example, the employee’s hourly rate is $15.

The downside of method 1

This first method is great to use if the employee does not work much overtime. The method is quick and easy to do. But if the employee does work a lot of overtime, you might pay a lot of overtime wages.

In the example above, the employee’s annual salary was $31,200 based on a standard 40-hour workweek.

What if you begin paying the employee the $15 per hour rate, but the employee actually works 45 hours per week?

First, calculate the employee’s earnings for the regular hours they worked during the week.

40 hours × $15 = $600 regular weekly earnings

Next, calculate the overtime rate of pay. The overtime rate is one and a half times the regular rate of pay.

$15 × 1.5 = $22.50 overtime rate

Multiply the overtime rate of pay by the weekly overtime rate.

$22.50 × 5 overtime hours = $112.50 weekly overtime wages

Add together the regular and overtime wages for the week.

$112.50 + $600 = $712.50 total weekly wages

Assuming that the employee consistently works 45 hours per week, you can multiply the total weekly rate by the number of weeks in a year to find the total yearly earnings.

$712.50 × 52 weeks = $37,050 total yearly wages

When you use this hourly wage calculation for salary employees, employees who work a lot of overtime will earn more as nonexempt hourly employees than they did when they were exempt salary employees. In this example, the employee would earn $5,850 more per year.

Have questions about overtime?

Download our FREE whitepaper, Learn How to Calculate and Pay Overtime Wages, for an overview of overtime laws, calculation examples, and more.

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Converting salary-to-hourly: Method 2

With the second method, you’ll learn how to convert salary to hourly based on the average hours the employee works each week.

First, you need to know the average number of hours the employee works each week. If you previously had nonexempt salaried employees track their time, use those records to calculate an average.

If you do not have time records, use your best knowledge of how much the employee typically works each week. You can also talk to the employee about how many hours they think they work.

Here is the basic equation for this method:

(Salary ÷ 52) ÷ ((Overtime Hours × 1.5) + 40)  = Hourly Rate

Let’s say your employee earns a salary of $31,200 per year and works an average of 45 hours per week.

To start, find the employee’s weekly salary. Divide the yearly salary by 52.

$31,200 ÷ 52 = $600 weekly salary

Next, figure out how many overtime hours the employee works each week. In this case, the employee works five overtime hours each week (45 – 40 = 5 hours).

Multiply the overtime hours by 1.5. This gives you the number of regular hours that is equivalent to the wages of the overtime hours.

5 × 1.5 = 7.5 hours

Add the regularly worked hours.

7.5 + 40 = 47.5 hours

Divide the employee’s weekly salary by the number of hours.

$600 ÷ 47.5 = $12.63 hourly rate

Using this second method, the employee’s hourly wage is $12.63.

The downside of method 2

The second method is good if the employee consistently works overtime hours. But if the employee does not work overtime, they might end up with fewer wages than when they were salaried.

For example, the employee works overtime but ends up only averaging 43 hours per week due to a fluctuating schedule. The employee will have reduced wages.

If this employee only works an average of 43 hours per week they would earn $29,225.82 per year. That’s $1,974.18 less per year than they would have earned as a salaried employee. If you use the second method to switch a salaried employee to an hourly employee, you can give a bonus if they do not earn enough to equal their former salary.

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