Hourly to salary: real math (not the "× 2,000" shortcut)

The shortcut and where it comes from

The classic US rule: annual salary ÷ 2,000 = hourly rate. Why 2,000? Because 40 hours × 50 weeks (52 minus 2 weeks of vacation) = 2,000 working hours per year.

Example: $80,000 / 2,000 = $40/hour.

The math checks out — for a US employee with two weeks of paid vacation working a strict 40 hours per week.

Why the shortcut breaks down

Different countries have different "working weeks"

Europeans typically get 4–5 weeks of paid vacation. The same $80K salary in France with 5 weeks PTO equates to:

• 40 hrs × (52 - 5) weeks = 1,880 working hours
• $80,000 / 1,880 = $42.55/hour

That's a 6% higher effective hourly rate than the US baseline for the same nominal salary, because European workers spend fewer hours earning the same salary.

Salaried employees often work more than 40 hours

A study by the Bureau of Labor Statistics found salaried professionals in the US work an average of 49 hours per week. So:

• 49 hrs × 50 weeks = 2,450 working hours
• $80,000 / 2,450 = $32.65/hour

Your effective hourly rate is 18% lower than the headline number suggests. This is what people mean by "I should have stayed hourly."

Holidays matter

The US has 11 federal holidays (typically 9-10 of which most employers observe as paid days off). That's another 80 hours not worked but paid.

Strict accounting: 50 weeks - 2 weeks PTO - 2 weeks holidays = 48 weeks × 40 hrs = 1,920 actual working hours. So $80K / 1,920 = $41.67/hour.

The accurate formula

Use this:

Effective hourly rate = annual gross salary ÷ (weeks worked × actual hours per week)

Where:

• Weeks worked = 52 - (PTO weeks + holiday weeks)
• Actual hours per week = the realistic average, not the contractual 40

Worked example: senior engineer at a US tech company

• Salary: $180,000
• PTO: 4 weeks
• Holidays: 12 days (2.4 weeks)
• Actual hours: 48/week (realistic for staff+ at most tech cos)
• Working weeks: 52 - 4 - 2.4 = 45.6
• Total working hours: 45.6 × 48 = 2,189
• Effective rate: $82.24/hour

Compare to the naive shortcut: $180,000 / 2,000 = $90/hour. The shortcut overstates by 9%.

Going the other way: hourly to salary

If you're a freelancer or contractor pricing yourself based on a "target salary equivalent," do the math in reverse:

Target hourly = (target salary + benefits + employer taxes) ÷ billable hours per year

• Target salary: $100,000
• Self-employment tax: +7.65% (the employer half of FICA that W-2 employees don't see)
• Health insurance, retirement, etc: +$15,000/year
• Billable hours: 30 hrs × 45 working weeks = 1,350 (not 2,000 — freelancers spend significant time on marketing, admin, downtime)
• Required hourly rate: ($107,650 + $15,000) / 1,350 = $90.85

To match a $100K salary, a freelancer needs to charge ~$91/hour, not $50/hour. This is why most new freelancers vastly underprice themselves.

Practical takeaways

1. For job offer comparison: the simple shortcut is usually fine. But add 10–20% to the "salary" hourly rate to account for unpaid extra hours.
2. For freelance pricing: charge 2× what your target salary would suggest. You need to cover benefits, self-employment tax, and significantly fewer billable hours.
3. For negotiation: think in terms of "effective hourly rate." A 10% raise on a 40-hour job is much more valuable than a 10% raise on a job where you actually work 60 hours.

Calculate yours

The Salary Calculator handles all five units (hour, day, week, month, year) and lets you adjust hours per day, days per week, weeks per year, and PTO. Run multiple scenarios — current state, target state, freelance equivalent — and compare.

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Last updated May 2026. If something here is wrong or out of date, email contactus@calculatehours.net — we update fast.