What an Hourly Wage Pays in a Year
Hourly pay is quoted per hour but lived per year, and the conversion is not "multiply by 40". Payroll uses 40 hours a week × 52 weeks = 2,080 paid hours a year, which is why a $20 an hour job is a $41,600 job. Each rate below is converted that way, then run through federal income tax and FICA so you can see the take-home figure, not just the gross.
- Federal income tax$4,0607.8%
- FICA — Social Security + Medicare$3,9787.6%
- Take-home pay$43,96284.5%
Every rate, converted the payroll way
Gross is 40 hours × 52 weeks. Net is after federal income tax and FICA for a single filer taking the standard deduction — no state tax, because that depends on where you live and is handled per state on the linked pages.
Why 2,080 hours and not 2,000
52 weeks × 40 hours is 2,080 hours. The reason is administrative, not physical: payroll needs one constant, so it uses the calendar year including the weeks you are on vacation. Hourly workers are usually not paid for those weeks — in that case the real annual figure is closer to 50 paid weeks, and each rate page shows what 50 and 48 weeks do to the number.
The conversion also runs backwards. A $52,000 salary divided by 2,080 hours is $25 an hour, which is exactly the comparison that matters when you weigh an hourly offer against a salaried one: the salaried job often comes with paid time off and no overtime, and the hourly job often comes with neither.
Three things that break the simple multiplication
Overtime. Above 40 hours a week, the FLSA requires 1.5× for non-exempt hourly workers. A 45-hour week at $20 pays $950, not $900: the five extra hours pay $30 each instead of $20, so overtime adds $50 a week that a flat 45 × $20 would miss. Every rate page breaks out 45 and 50 hour weeks with that premium calculated properly.
Progressive tax. Doubling your hourly rate does not double your take-home: each additional dollar is taxed at the marginal rate, which climbs from 10% to 37%. A rate that looks like a 20% raise can land as a 14% raise in the bank.
The Social Security cap. Social Security stops at $184,500 of wages. Below that, every extra dollar of pay carries 6.2% of Social Security plus 1.5% of Medicare; above it, only Medicare. That is why take-home jumps as a percentage right at the cap.
Hourly work and the parts that are not on the paycheck
No paid vacation, no paid sick days, no employer contribution to a retirement account in most hourly roles, and hours that can be cut without notice in most states. The annual figure on these pages assumes you are paid for all 52 weeks at a steady 40 hours, which is the optimistic case, not the typical one.
If you are comparing an hourly offer with a salary offer, compare the yearly gross at the hours you will actually work, then compare benefits. A $22 an hour job at 40 hours is $45,760; a $50,000 salary with 15 days of PTO and a 3% 401(k) match is worth more than the difference in gross suggests.
Questions
How do I turn an hourly wage into a salary?
Multiply by 2,080 for the standard full-time year. $18 an hour is $37,440; $25 is $52,000; $40 is $83,200. If you work fewer hours or take unpaid weeks, multiply by the hours you are actually paid instead.
Is the take-home figure here what I will see on my check?
Only if your state has no income tax and you make no pre-tax contributions. Otherwise subtract state tax (see the state index) and add back any 401(k) or HSA contribution, which lowers federal tax but not FICA.
Do hourly workers pay more tax than salaried workers?
Same rates, same brackets. The differences are practical: overtime is fully taxable ordinary income, and hourly workers more often have several employers in a year, which can mean each one withholds as if it were your only job.
Sources
- IRS Publication 15 (Circular E) — withholding tables, FICA rates and the wage base.
- US Department of Labor, Wage and Hour Division — FLSA overtime requirements.
- Social Security Administration — annual Social Security wage base.
Single filer, standard deduction, no pre-tax contributions. Educational estimate, not tax advice.