Hourly vs. Salary: How to Compare Two Job Offers
Four steps to compare an hourly offer with a salaried one fairly — including overtime, benefits and the effective hourly rate on long weeks.
Step 1: put both offers on the same annual basis
The fastest way to compare an hourly offer with a salaried one is to convert both to a yearly figure. A standard full-time year is 2,080 hours (40 hours × 52 weeks), so an hourly rate × 2,080 gives annual pay: $30/hour is $62,400 a year; $36.06/hour is $75,000. Use the Hourly to Salary Calculator or the Salary to Hourly Calculator to do the conversion in either direction.
Step 2: account for overtime
Non-exempt hourly employees must be paid at least 1.5× their regular rate for hours over 40 in a workweek under federal law. At $30/hour, five overtime hours a week pays $45/hour for those hours — about $11,700 more per year (5 hours × $45 × 52 weeks), taking the total to $74,100. Most salaried "exempt" employees receive no overtime pay at all, so their real hourly rate falls when they work longer weeks.
| $75,000 salary, hours per week | Effective hourly rate |
|---|---|
| 40 hours | $36.06 |
| 45 hours | $32.05 |
| 50 hours | $28.85 |
Step 3: price the benefits
Salaried roles more often include paid time off, a 401(k) match and subsidized health insurance — but check the actual offer. A 4% match on $75,000 is worth $3,000 a year; two extra weeks of paid vacation at $36.06/hour is about $2,885. Hourly roles that pay more per hour but offer no paid leave can end up behind once you subtract unpaid weeks. Put a dollar figure on each benefit, add it to the base pay, and compare totals.
Step 4: compare take-home pay, not just gross
Taxes depend on where you live and your filing situation rather than on the job itself, so finish by running both offers through the Paycheck Calculator. A higher gross offer in a high-tax state can leave less in your bank account than a slightly lower offer in a state with no income tax — see our state-by-state take-home comparison.
Exempt vs. non-exempt: the legal side
Whether you receive overtime depends on your job duties and pay, not on whether you are called "hourly" or "salaried." As of this writing the federal minimum salary level for the white-collar overtime exemptions is $684 per week ($35,568 a year), and several states set higher thresholds. Confirm current rules with the Department of Labor or your state labor department.