How to Convert Hourly Pay to Annual Salary
The standard formula is straightforward: hourly rate × hours per week × 52 weeks. A $25/hour job at a standard 40-hour week works out to $52,000/year. But this simple version misses two things a lot of people run into: overtime and unpaid time off — this calculator handles the first directly.
How Overtime Changes the Math
Under the federal Fair Labor Standards Act (FLSA), most hourly (non-exempt) employees are entitled to 1.5× their regular rate — "time-and-a-half" — for any hours worked beyond 40 in a single workweek. If you regularly work overtime, your effective annual pay is meaningfully higher than the simple 40-hour calculation would suggest.
Worked Example — With Overtime
| Item | Amount |
|---|---|
| Hourly rate | $25.00 |
| Regular pay (40 hrs × $25) | $1,000.00 / week |
| Overtime rate (1.5×) | $37.50 / hr |
| Overtime pay (5 hrs × $37.50) | $187.50 / week |
| Total weekly pay | $1,187.50 |
| Annual (× 52 weeks) | $61,750 |
That's nearly $10,000 more per year than the base 40-hour calculation of $52,000 — overtime adds up fast when it's a regular part of your schedule.
Is Overtime Taxed Differently?
No — this is one of the most persistent myths about paychecks. Overtime income is taxed exactly like regular wages; there's no separate "overtime tax bracket." What actually happens is that a bigger paycheck in a given pay period can trigger higher withholding for that specific check (since payroll systems often annualize each paycheck to estimate withholding), which can make it feel like overtime is taxed at a higher rate. Over the full year, though, your effective tax rate depends only on your total annual income — not on how it was earned.
Gross Pay vs. Take-Home Pay
Everything on this page is gross pay — before any tax withholding, FICA, or benefit deductions come out. Your actual take-home pay will be meaningfully lower. Use our Take-Home Pay Calculator to see what actually lands in your bank account.
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Frequently Asked Questions
This calculator assumes 52 paid weeks per year and doesn't account for unpaid leave, salaried-exempt overtime exclusions, or state-specific overtime rules (some states have daily overtime thresholds in addition to weekly ones).