Salary versus hourly: which actually pays more

$30 an hour for 40 hours across 52 weeks is $62,400. A salary of $62,400 is the same number. Tax treats them identically. Everything that makes them different is about hours.

The 2,080-hour assumption

Converting hourly to annual assumes 40 paid hours a week for 52 weeks. That includes paid vacation and holidays. If your hourly job does not pay for time off, 50 weeks is closer, and the annual equivalent is 4% lower before you start.

Overtime is the hourly worker's edge

A non-exempt hourly worker gets time and a half over 40 hours. Five hours a week on $30 is $11,700 a year on top. A salaried exempt employee working the same 45 hours gets nothing extra. In a job with regular overtime, the hourly rate can out-earn a higher salary.

Salary is the steadier check

A salaried employee is paid the same for a short week, a sick day or a holiday. Hourly pay drops with hours, which matters in seasonal work and in any week with unpaid absence. Benefits also tend to be richer on the salaried side, though that is convention, not law.

Exempt is not the same as salaried

Being paid a salary does not remove overtime rights. Exemption requires both a salary above the federal threshold and duties that qualify as executive, administrative or professional. A salaried worker below the threshold, or doing non-exempt work, is owed overtime like anyone else.

Comparing an offer

Convert both to the same period at the hours you will actually work, then take the tax off both with the same state and filing status. The calculator does the second part; only you know the first.

Run your own numbers

Every figure above came from the paycheck calculator with 2026 rates.

Frequently asked questions

Is hourly pay taxed differently from salary?

No. Both are ordinary wages with the same federal income tax, Social Security, Medicare and state tax. The withholding on an hourly check varies with the hours, but the rates are identical.

How do I convert a salary to an hourly rate?

Divide by 2,080 for 40 hours a week over 52 paid weeks. Divide by 2,000 if time off is unpaid, or by about 1,880 for hours actually worked after holidays and vacation.

Do salaried employees get overtime?

Some do. Exemption from overtime depends on a salary threshold and on the work performed, not on being called salaried. Below the threshold or outside the exempt duties, overtime is owed.