What's a 'full' work year?

2,080 hours is the standard (40 hours × 52 weeks), but that's what you're paid for, not what you work. Subtract 80 hours of PTO (two weeks vacation) and 80 hours of sick/holiday and you're down to 1,920 billable hours. Salaried workers who don't take their full PTO or work extra hours push the ratio further down.

Should commute time count as work time?

In a strict financial sense, yes — it's time you're committing to the job that you wouldn't spend otherwise. A 45-minute one-way commute is 1.5 hours/day, 7.5 hours/week. For a $75k salary with no commute, that's $36/hour; add the commute and the real wage drops to $33/hour before any other adjustments.

Are salaried people really making less than hourly?

In many cases, yes. Hourly workers get overtime after 40 hours (1.5x for non-exempt roles). Salaried workers often put in 45-55 hours with no additional pay, effectively lowering their hourly rate while taking on more workload. When comparing offers, calculate hourly rate using realistic work hours, not just contracted ones.

What's a fair benefits premium?

Total benefits package typically adds 20-30% to base salary value. Health insurance is the biggest chunk — employer-paid portion averages $15-20k/year for family coverage. 401k match adds 3-6% of salary. Paid time off, life insurance, and disability are smaller but real. When comparing jobs, add up employer contributions, not just the matching percentages.

How do I compare a W-2 offer to a contract or freelance role?

Contractors/freelancers pay both sides of FICA (15.3% vs. employee 7.65%), buy their own health insurance ($5-15k/year), and get no paid time off. Rule of thumb: a freelance rate needs to be 30-40% higher than an equivalent W-2 hourly rate to break even on total compensation.

Salary to Hourly: What Are You Really Making?

Divide a $75,000 salary by 2,080 hours and you get $36/hour. It's an alluringly round number — and almost completely wrong. The actual pay you take home and enjoy, per hour of your life you commit, is usually much less. Here's the more honest math.

The textbook number

Standard formula: salary ÷ (40 hours × 52 weeks) = salary ÷ 2,080.

$50k → $24.04/hour
$75k → $36.06/hour
$100k → $48.08/hour
$150k → $72.12/hour

See the quick conversion with the

salary-to-hourly calculator

Adjustment 1: Taxes take ~25-35%

On a $75k salary in a state with average income tax, federal + state + FICA eats roughly 25-30% of gross.

Federal income tax: ~10-14%
FICA (Social Security + Medicare): 7.65%
State income tax: 0-10% depending on state
Local income tax (some cities): 1-4%

$75k gross → ~$56,000 net take-home in most states. Real hourly take-home: $27/hour, not $36.

Run your exact numbers with the

paycheck calculator

Adjustment 2: You work more than 40 hours

Studies show the average salaried white-collar worker puts in 45-50 hours/week counting email after dinner and Sunday-night planning. Managers and professionals often hit 55-60. At 50 hours/week over 50 working weeks, you're at 2,500 hours, not 2,080 — a 20% time increase for zero pay increase.

$56,000 net / 2,500 hours = $22.40/hour of actual pay for actual work. Still better than minimum wage but 37% below the $36 sticker.

Adjustment 3: The commute

A 45-minute one-way commute is 1.5 hours of your day, 7.5 hours per week, 375 hours per year. If you count this time as "work time" (because without the job, you wouldn't be doing it), your total hours climb to 2,875.

$56,000 / 2,875 = $19.48/hour. Down nearly 50% from the sticker.

If you also add the direct cost of commuting — gas, tolls, car wear and tear, or transit passes — you're spending $2,000- $8,000/year out of take-home pay. That's another 4-14% off the top.

Adjustment 4: Benefits go both ways

Some adjustments go in your favor. Employers pay significant costs beyond your salary:

Health insurance (family coverage): employer portion averages $15,000-$22,000/year.
401k match: typically 3-5% of salary; $2,250 on a $75k.
PTO and holidays: ~4-6 weeks of paid time you aren't working (10-12% of gross).
Employer FICA: they pay another 7.65% into Social Security and Medicare on your behalf.

Total employer cost for a $75k employee with family health coverage and average benefits is typically $95-$110k/year. That's a "total comp" perspective that matters when comparing offers or considering freelancing.

The freelance breakeven

Freelancers trade employer benefits for flexibility and higher hourly rates. To match a $75k salary with benefits, a freelancer needs to earn:

Base salary: $75,000
Employer-paid health: $15,000
Self-employment FICA (both sides): extra ~$5,700 on $75k
No PTO: need ~4 weeks more billable hours
Variable income buffer + retirement self-funding: ~$8,000

To truly match, a freelancer needs ~$105k in revenue, earned over ~1,900 billable hours (discounting unbillable admin, marketing, sick days). Target rate: ~$55/hour billable. Anything lower is a pay cut vs. the equivalent W-2.

A worked example: three offers, one decision

Suppose you have three job offers on the table. Here is how the life-adjusted hourly shakes out when you run the full math:

Offer	Salary	Commute (one-way)	Avg weekly hours	Est. net take-home	Life-adjusted hourly
A — downtown firm	$95,000	55 min	52 hrs	~$68,000	~$18.90/hr
B — hybrid 3 days/wk	$82,000	35 min (3 days)	45 hrs	~$60,000	~$22.50/hr
C — fully remote	$78,000	0 min	42 hrs	~$57,500	~$26.20/hr

Offer A pays the most on paper but delivers the lowest hourly rate of life. Offer C pays the least on paper but leaves you with more net dollars per committed hour. This table is illustrative — your actual tax rate and commute costs will differ — but the pattern is consistent: high salary with a brutal commute and long hours usually loses to moderate salary with flexibility.

Use the

salary-to-hourly calculator

to plug in the exact numbers for your specific offers before you accept or decline.

Common mistakes in salary comparisons

Ignoring the bonus structure. A $75k base with a guaranteed 15% bonus is $86,250. A $90k base with a "discretionary" bonus that never materializes is $90k in theory, $90k in practice. Get the last 3 years of actual bonus payouts in writing.
Comparing gross to gross across states. A $100k salary in Texas (no state income tax) nets ~$74k. The same $100k in California nets ~$67k. A job offer needs to be roughly $10k higher in a high-tax state to match the same take-home elsewhere.
Forgetting parking and work attire. Downtown office parking can run $150-$400/month. Some roles require professional attire, dry-cleaning, or client entertainment. These costs are real deductions from your net hourly.
Overvaluing unlimited PTO. Research consistently shows unlimited PTO employees take fewer days off than those with a defined allotment, because there is no "use it or lose it" incentive. Treat it as a lifestyle perk, not a financial benefit.

A more honest comparison framework

When evaluating a new job offer or thinking about current compensation, calculate:

Gross hourly: salary ÷ realistic annual hours (include overtime).
Net hourly: take-home ÷ realistic annual hours.
Life-adjusted hourly: take-home ÷ (hours worked
- commute + job-related time). This is what you're really trading time for.
Total comp: salary + employer-paid benefits + bonus + equity. Use this for offer-to-offer comparison.

Someone earning $85k at a 30-min commute WFH hybrid with 20 days PTO may actually make more per hour-of-life than someone earning $100k with a 60-min commute, unlimited-PTO-that-nobody-takes culture, and on-call hours.

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Salary to hourly

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