Hourly or Salaried? How to Compare Two Offers Properly
Published · 3 min read · By The Samsung Calculator editorial team
The comparison nobody does correctly
Converting between hourly and annual pay is one multiplication: $30 × 40 hours × 52 weeks = $62,400. That number is where most comparisons start and finish, and it is wrong in both directions at once — it ignores unpaid leave on the hourly side and unpaid overtime on the salaried side, and it ignores benefits entirely.
What each side is really worth
| Factor | Hourly | Salaried |
|---|---|---|
| Paid weeks per year | Only weeks worked — often 48–50 | All 52 |
| Overtime | Legally required above 40 h (non-exempt) | Usually none (exempt) |
| Extra hours | Paid for every one | Absorbed by the salary |
| Health contribution | Often none or partial | Typically 8–15% of pay |
| Retirement match | Frequently unavailable | Commonly 3–6% of pay |
| Paid leave and sick pay | Rare | Standard |
| Income stability | Varies with hours offered | Fixed |
| Payroll tax (US, self-employed) | Both halves: 15.3% | Employer pays half |
When hourly wins
When hours genuinely exceed 40 and overtime is paid, hourly work at the same headline rate simply pays more. It also wins when you value control: contract and hourly roles are easier to leave, easier to stack, and price extra work honestly rather than absorbing it.
For independent contractors, the rule of thumb is to charge 1.5 to 2 times the equivalent employee hourly rate. That multiple covers self-employment tax, unpaid leave, insurance, retirement and the unbillable time that every contract business carries.
When salaried wins
When benefits are substantial and hours are genuinely contained. Employer health contributions, retirement matching and paid leave regularly add 25–30% on top of base pay, and none of it appears in an hourly comparison. Income stability also has real value that is hard to price and easy to underrate until you need it.
The number to compare
Convert both offers to total annual compensation, then divide by the hours you will actually work. For the salaried role, add the employer's benefit contributions and use your realistic weekly hours, not the contracted 40. For the hourly role, use paid weeks only and subtract what you must buy yourself.
Done properly, a $30/hour contract with no benefits at 48 paid weeks comes to about $57,600, while a $62,000 salary with a 4% match and employer health cover is worth closer to $73,000 — and the gap widens further if the salaried role sticks to 40 hours while the contract runs to 45.
Run your own numbers
Convert an hourly rate into weekly, biweekly, monthly and annual pay, with overtime folded in at your own multiplier.
About this article
Written and reviewed by The Samsung Calculator editorial team. Every calculator is written against a published formula, reviewed against at least one independent reference implementation, and dated when it changes. Last updated July 1, 2026. Spotted an error? Tell us.