A $55,000 salary sounds bigger than $25 an hour, and $25 an hour times 2,080 hours is only $52,000. But that shortcut assumes both jobs ask for the same 40 hours, pay the same way for extra time, and treat time off the same. Comparing offers fairly means putting both on the same footing.
Step 1: Use the hours you will actually work
Ask what a normal week looks like, not the contract minimum. A salaried role that regularly runs 45 or 50 hours pays less per hour than one that runs 40.
Step 2: Check whether overtime applies
Hourly employees who are nonexempt under federal law earn at least time and a half for hours over 40 in a workweek. Many salaried employees are exempt and get no overtime, but being salaried does not by itself make someone exempt. It depends on duties and pay. Ask the employer how the role is classified.
Step 3: Price time off
Federal law does not require paid vacation or holidays. If the hourly job does not pay for days off and the salaried one does, the hourly annual total should exclude unpaid weeks.
Worked example: both jobs run 45 hours a week
Offer A: $25.00 an hour, overtime after 40 hours at time and a half.
- Regular: 40 × $25.00 = $1,000.00
- Overtime: 5 × $37.50 = $187.50
- Weekly: $1,187.50, so over 52 weeks: $61,750
Offer B: $55,000 salary, exempt, no overtime.
- Hours per year: 45 × 52 = 2,340
- Effective hourly rate: $55,000 ÷ 2,340 = $23.50 an hour
At 45 hours a week, the hourly offer pays $6,750 more a year, even though its 40-hour annual figure ($52,000) looks lower. At exactly 40 hours a week, the comparison flips: $52,000 against $55,000.
Now add unpaid time off
If Offer A gives no paid vacation and you expect to take two weeks off, its annual total drops to 50 × $1,187.50 = $59,375. Still ahead of $55,000 in this example, but the gap narrows.
A checklist for comparing offers
| Question | Why it matters |
|---|---|
| How many hours does a normal week really take? | Sets the effective hourly rate |
| Is the role eligible for overtime? | Extra hours may or may not be paid |
| Are holidays and vacation paid? | Unpaid weeks reduce annual pay |
| Are there bonuses or commissions? | Variable pay changes the total |
| What benefits come with it? | Health insurance and retirement matching have real value |
| How often are you paid? | Affects budgeting, not annual totals |
Tools
- Job offer comparison calculator: two or three offers side by side, with overtime, benefits, commute, and pay per hour worked.
- Hourly to salary calculator: an hourly rate as yearly, monthly, and per-paycheck pay, with unpaid weeks.
- Salary to hourly calculator: the hourly rate behind a salary at your real hours.
- Overtime calculator: what extra hours add to an hourly offer.
Sources
About this guide. Written for US employees as general information, not legal or tax advice. Rules can differ by state, employer, and contract. See our methodology and disclaimer.