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How hourly pay becomes a salary

Annual pay is hourly wage times hours a week times weeks a year. At $15 an hour for 40 hours a week across 52 weeks, that is $31,200 a year, or $600 a week, before tax. Monthly on this page is the year split twelve ways, $2,600, not four weeks of pay.

Annual pay, before tax

$31,200.00

$600.00 a week. $2,600.00 a month if the year is split into twelve.

Weekly
$600.00
Monthly (annual / 12)
$2,600.00
Annual
$31,200.00
$

Paid hours, not the hours a job asks you to be around.

52 is every week paid. 50 is two weeks unpaid. Monthly pay is annual divided by 12, not four weeks.

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What a paycheck actually pays

In short

  • Annual pay is A=h×w×nA = h \times w \times n. At $15 an hour, 40 hours a week, 52 weeks, weekly pay is $600 and the year is $31,200.
  • Monthly on this page is annual divided by 12, so $2,600. Four times weekly is $2,400, which is a 48-week year, not a 52-week year.
  • At $18 an hour for 25 hours, weekly pay is $450 and the year is $23,400. The higher hourly wage did not beat $31,200, because the hours fell.
  • Keep $15 and 40 hours, cut the year to 50 paid weeks, and annual pay is $30,000. Weekly pay is still $600. The unpaid weeks cut the year, not the week.
  • This is gross pay in pre-tax dollars. Take-home is a later slice.

Three numbers, not two

A wage quoted by the hour is not a year until you say how many hours a week and how many weeks a year:

A=h×w×nA = h \times w \times n

At $15 an hour for 40 hours a week, weekly pay is $600. Across 52 weeks that is $31,200 a year. The hourly to salary calculator on this page is that product.

Monthly here is A/12A / 12, so $2,600. It is not four times weekly pay. Four times $600 is $2,400, which adds up to 48 weeks and leaves four weeks of the year uncounted. A year is 52 weeks and 12 months. Split the year twelve ways if you want a monthly figure that adds back up to $31,200.

This is gross pay, in pre-tax dollars. FICA and withholding have not been taken off. The next page for those slices is how FICA works.

Part-time is not a smaller hourly number

Hold the year at 52 paid weeks. Raise the wage to $18 an hour and cut the week to 25 hours. Weekly pay is $450. Annual pay is $23,400. Monthly, split twelve ways, is $1,950.

The hourly figure went up. The year went down, from $31,200 to $23,400, because the hours fell. Comparing two jobs on the hourly quote alone is how a 25-hour week looks like a raise.

If overtime is regular, fold it into the hourly figure or into hours a week as a blended input. A week of 40 at one rate and 10 at another is two lines added, not one slider.

Unpaid weeks cut the year, not the week

Keep $15 and 40 hours, but only 50 weeks are paid. Weekly pay is unchanged: $600. Annual pay is $30,000. Monthly on the twelve-way split is $2,500.

Unpaid leave, a seasonal shutdown, or an unpaid training gap does not change what a working week pays. It changes how many of those weeks exist. Type the weeks that are actually paid, not 52 out of habit.

What this page is not doing

It is not net pay, not overtime, and not a monthly budget. A 50/30/20 split that runs on $31,200 of gross will print buckets the account will never see. Run the split on take-home, which is what how the 50/30/20 budget works is for.

The three sheets are $15 at 40 hours across 52 weeks, $18 at 25 hours across 52 weeks, and $15 at 40 hours across 50 weeks. This is educational material, not financial advice.

Worked examples

\$15 an hour, 40 hours, 52 weeks

A job pays $15 an hour for 40 hours a week, 52 weeks a year. What is weekly, monthly and annual gross pay?

  1. Weekly: 15×40=60015 \times 40 = 600, so $600.
  2. Annual: 600×52=31200600 \times 52 = 31200, so $31,200.
  3. Monthly as annual divided by 12: 31200/12=260031200 / 12 = 2600, so $2,600.
  4. Four times weekly is 4×600=24004 \times 600 = 2400, so $2,400, which is not a month of a 52-week year.

Weekly pay is $600. Annual pay is $31,200. Monthly, split twelve ways, is $2,600.

\$18 an hour, 25 hours, 52 weeks

The same year of 52 paid weeks, but the job is 25 hours at $18 an hour. What is annual pay?

  1. Weekly: 18×25=45018 \times 25 = 450, so $450.
  2. Annual: 450×52=23400450 \times 52 = 23400, so $23,400.
  3. Monthly: 23400/12=195023400 / 12 = 1950, so $1,950.

Annual pay is $23,400. The higher hourly wage did not beat the first sheet's $31,200, because the hours fell.

\$15 an hour, 40 hours, 50 weeks

Keep $15 and 40 hours, but only 50 weeks are paid. What is annual pay?

  1. Weekly pay is unchanged: 15×40=60015 \times 40 = 600, so $600.
  2. Annual: 600×50=30000600 \times 50 = 30000, so $30,000.
  3. Monthly on the twelve-way split is 30000/12=250030000 / 12 = 2500, so $2,500. Weekly pay did not change.

Annual pay is $30,000. Weekly pay is still $600. Monthly, split twelve ways, is $2,500.

Common questions

Is this take-home pay?

No. This is gross pay before FICA and income-tax withholding. At $15 an hour for 40 hours across 52 weeks, the year is $31,200 before those slices. The paycheck calculator is the next page if you want them taken off.

Why is monthly pay not four times weekly pay?

Because a year is 52 weeks and 12 months, not 48 weeks. Annual divided by 12 is the monthly figure that adds back up to the year. On the first sheet that is $2,600, not $2,400.

What about overtime?

Not modelled. If overtime is regular, fold it into the hourly figure or into hours a week as a blended input. A week of 40 at one rate and 10 at another is two lines added, not one slider.

Keep reading

This page is educational material, not financial advice. The figures come from the formula shown and assume the inputs you enter hold for the whole term. Your own rate, fees, taxes and timing will differ, so treat the output as arithmetic to check a decision against, not as a recommendation.