Comparing a job offer quoted hourly against one quoted as an annual salary feels like it should be a one-line calculation. Multiply the hourly rate by hours worked in a year, or divide the salary by those same hours, and you have your answer. That math is real, but the default assumption baked into it -- a full, uninterrupted work year -- is where the comparison usually goes wrong.
The 2,080-hour assumption
The standard shortcut for converting an hourly rate to an annual figure assumes 40 hours a week for 52 weeks, or 2,080 hours a year. That's the number most online calculators and back-of-envelope comparisons default to, and it's a reasonable starting point. But it assumes zero unpaid time off, zero holidays, and a work year with no gaps -- which describes very few actual jobs.
Salaried pay already has time off baked in
When a job is quoted as an annual salary, paid holidays and vacation days are typically already factored into that number -- you get paid the same amount whether a given week has a holiday in it or not. An hourly rate doesn't work that way by default. If you don't work, you generally don't get paid for those hours, unless the role specifically includes paid time off. So a $30/hour contract role and a salaried role that converts to $30/hour on paper aren't actually equivalent once you account for the weeks the salaried employee gets paid without working.
Monthly figures hide the same issue in a different way
Monthly pay looks like it should just be annual divided by 12, and for salaried roles that's usually exactly right since salary is a fixed yearly figure split evenly. But if you're converting from an hourly rate, months aren't uniform -- some have more working days than others, and using a flat "4.33 weeks per month" average is an approximation, not an exact figure for any specific month.
What actually changes the comparison
Beyond time off, benefits are the other piece that a rate conversion alone won't capture: health insurance, retirement matching, and other employer-paid benefits have real monetary value that doesn't show up in a base pay rate at all. None of that means rate conversion is useless -- it's still the right first step for putting two offers on the same footing. It just means the number it gives you is a starting point for comparison, not the full picture of what each job actually pays.
Doing the conversion
For the base-rate math itself, the Salary Calculator converts between annual, monthly, and hourly figures so you're not doing the multiplication by hand -- useful for sanity-checking an offer or figuring out what an hourly contract rate actually works out to over a year.