Salary ↔ Hourly Rate
Convert between an annual salary and an hourly rate - useful when comparing a job offer to your freelance income.
Why this number isn't your real take-home rate
This conversion is a straight-line gross calculation - it doesn't account for self-employment tax, platform commissions, unpaid admin hours, or business overhead that a freelancer carries but an employee doesn't. If you're sizing up a freelance rate against a salaried offer, run the numbers through the full Loomrate rate calculator to see your real net hourly rate, or use the freelance vs. employee comparator for a side-by-side total-compensation view.
Why "salary ÷ 2,080" gives you the wrong number
The standard conversion divides an annual salary by 2,080 - 52 weeks at 40 hours. It is the right arithmetic for an employee and the wrong arithmetic for a freelancer, because it silently assumes two things that are only true of employment: that every one of those hours is paid, and that the salary is the whole of what the job costs.
Neither holds when you work for yourself. Nobody pays you for the Tuesday you spent writing proposals, and your rate has to cover the costs an employer would otherwise absorb on your behalf. The gap between the two is not a rounding error - it is routinely 50-90% of the headline figure.
What an employer pays that a salary figure never shows
A $90,000 salary does not cost an employer $90,000. On top of it they typically carry:
- The employer half of payroll taxes - roughly 7.65% of wages in the US. As a freelancer you pay both halves through self-employment tax.
- Health insurance - often the single largest line, and one you now buy at individual-market prices rather than group rates.
- Retirement contributions - any match disappears entirely when you leave employment.
- Paid time off - holiday, sick days, and public holidays are paid salary for hours not worked. Freelance equivalents are unpaid.
- Equipment, software, and workspace - provided at work, bought by you when freelance.
- Downtime between projects - an employee is paid in a quiet week. A freelancer is not.
This is why a straight salary-to-hourly conversion is a floor, not a target. To match the real value of a salaried package, most freelancers need a rate somewhere between 1.5× and 2× the naive hourly conversion - more if the field carries high non-billable overhead.
A worked example
Take a $90,000 salary. The naive conversion gives $43.27/hour. Now recalculate it as a freelancer targeting the same take-home:
naive: $90,000 ÷ 2,080 hrs = $43.27/hr
realistic: weeks actually worked = 46 (6 weeks off)
hours per week = 40
non-billable share = 30%
billable hours = 46 × 40 × 0.70 = 1,288
business expenses = $6,000
required billings = $90,000 + $6,000 = $96,000
rate = $96,000 ÷ 1,288 = $74.53/hr
That is a 72% difference on identical take-home, before adding anything for the benefits the salary included. It is also why freelancers who price off salary benchmarks tend to end up working more for less - the benchmark was never measuring the same thing.
For a project-level view that also accounts for platform commission and scope creep, run a real engagement through the full rate calculator, or compare the two arrangements directly with the freelance vs. employee comparator.
Frequently asked questions
What hourly rate is equivalent to an $80,000 salary?
The naive conversion is $38.46/hour ($80,000 ÷ 2,080). As a freelancer targeting the same take-home you would typically need $60-$75/hour, because you are covering your own payroll taxes, benefits, unpaid time off, and non-billable hours. The exact figure depends on your expenses and how much of your week is billable.
How many hours are in a work year?
2,080 is the standard full-time figure - 52 weeks at 40 hours. It is useful for salary comparisons but misleading for freelancers, who typically work 46-48 weeks and can only bill 60-75% of those hours once admin, sales, and unpaid revisions are removed.
How much more should a contractor charge than an employee earns?
A common rule of thumb is 1.5× to 2× the equivalent hourly salary. The multiplier covers the employer half of payroll tax, health insurance, retirement contributions, paid leave, equipment, and unpaid gaps between contracts. Fields with heavy non-billable overhead sit at the upper end.
Can I convert an hourly rate back to a salary?
Yes, and this calculator does both. Converting freelance-to-salary is the more useful direction when weighing a job offer: multiply your billable hours by your rate, subtract business expenses, then remember the salary figure comes with benefits your freelance income has to buy separately.