Enter both job offers with their real hours, benefits, and overtime — the calculator converts both to a true hourly rate and annual total so you are comparing the same thing.
Two offers on the table: $75,000 salary or $38 an hour. The salary is the obvious win — until you notice it expects 50-hour weeks with no overtime pay and a health plan you fund yourself, while the hourly job pays time-and-a-half past 40 and the employer covers benefits. Do the real math and the $75k salary is $28.85 an actual worked hour, and suddenly it isn't obvious at all. This calculator levels the two onto the same ground: enter the salary's true weekly hours, PTO, employer insurance value, and 401k match, plus the hourly side's overtime, unpaid days, and self-paid insurance, and it spits out a Salary True $/hr against an Hourly Annual number you can finally trust.
The output panel shows the Winner, the Annual Difference, and the Benefits Value that often determines which way a close call breaks. A $3,000 health insurance contribution and a $2,000 401k match add $5,000 in annual value that never shows up on the offer letter. The tool makes those invisible components visible.
The unpaid overtime problem that makes salaries look better than they are
A $75,000 salary at 40 hours a week is $36.06/hr. At 50 hours a week with no overtime pay, the same salary is effectively $28.85/hr. Enter your Actual Hours per Week including unpaid overtime into the salary side of the calculator, and watch the true hourly rate drop. This one adjustment is often the most revealing number in the comparison.
Salaried workers frequently underestimate their weekly hours. If you are answering emails after dinner and taking calls on weekends, that is real labor time. A conservative estimate of 45-48 hours is common in professional and management roles. Running the comparison with your honest number rather than the contractual 40 can flip a salary advantage into a hourly advantage on the true rate.
Benefits value: what employers subsidize that the paycheck never shows
Employer-provided health insurance is worth $7,000–$22,000 annually depending on coverage tier, employer contribution percentage, and family status. The calculator takes your Employer Health Insurance Value (annual) as a direct dollar figure — enter the employer's contribution to your premium, not the total premium. A $600/month employer contribution is $7,200/year in non-salary compensation.
The 401k match works similarly. If your employer matches 4% of a $75,000 salary, that is $3,000 in annual value. Enter it in the 401k Match (annual) field on the salary side. The Benefits Value output sums health insurance, PTO value, and 401k match into a single comparison figure. When a salary offer includes rich benefits and the hourly role requires you to pay your own insurance, the gap is often $8,000–$15,000 per year — more than enough to flip the winner.
Overtime eligibility: how the hourly math compounds upward
Most hourly roles are overtime-eligible under the FLSA, meaning hours above 40 per week pay at 1.5x the base rate. Enter your expected Overtime Hours per Week and the calculator folds that into the annualized hourly total. At $38/hr base, 5 hours of weekly overtime adds roughly $7,410 per year ($57/hr times 5 hrs times 26 bi-weekly periods). That changes the comparison materially.
Salaried exempt employees receive no such multiplier. The Overtime Scenarios tab models how the hourly advantage grows as overtime hours increase — useful if your role involves seasonal heavy periods or regular deadline crunches. A salaried position at $80,000 can look worse than a $36/hr hourly role the moment regular overtime enters the picture.
PTO and unpaid days: the hours-worked denominator most people miss
The salary model uses PTO Days per Year to calculate the true effective hourly rate. More PTO means fewer worked hours for the same salary — that raises the effective hourly rate. An employee with 25 PTO days works roughly 200 fewer hours per year than an employee with 5 days, making the same salary worth more per hour worked. Enter your negotiated PTO days accurately; it moves the number more than most people expect.
On the hourly side, Unpaid Days Off per Year handles the equivalent: days you do not work means days you do not get paid. A position with no paid time off and 10 unpaid sick days per year is effectively paying you for 250 days of the year. The calculator adjusts the hourly annualized total accordingly, so both offers are denominated in the same worked-hours universe.
When the comparison is close: what the number doesn't tell you
The tool produces a clean winner and a dollar advantage. When the margin is under $5,000 annually on a total-comp basis, other factors dominate: job security, flexibility, career trajectory, manager quality, and commute. The comparison removes the confusion of apples-to-oranges compensation structures — it does not replace judgment about which role fits your life better.
If the salary and hourly offers are within $3,000 of total annual compensation, you are looking at a tie within the margin of estimation error. The health insurance value estimates are ranges, the PTO is worth different things to different people, and overtime hours can vary by quarter. Use the tool as a confidence check that you are not dramatically misreading one offer, then let the qualitative factors carry the final call. Run both offers through the true-hourly comparison now — free, takes three minutes, and you'll negotiate from a position of knowing your number.
How to use it
- Enter Annual Salary and Actual Hours per Week including unpaid overtime for the salary option — use your honest expected weekly hours, not the contract number.
- Fill in PTO Days per Year, Employer Health Insurance Value (annual), and 401k Match (annual) for the salary's benefits package.
- Enter Hourly Rate, Hours per Week, and Overtime Hours per Week for the hourly option.
- Fill in Unpaid Days Off per Year and Self-Paid Insurance (annual cost to you) for the hourly role.
- Read Winner, Salary True $/hr, Hourly Annual, Annual Difference, and Benefits Value in the results panel, then check the Benefits Gap Analysis tab.
Who it's for
- Job seeker choosing between two competing offers — A $72,000 salary at a company with full benefits versus $38/hr with no employer health coverage. After adding $9,000 in employer insurance value and a $2,880 401k match to the salary, it comes out $14,400 ahead of the hourly offer annualized — and that excludes the unpaid overtime the salaried role requires.
- Contractor deciding whether to accept a staff conversion — A $65/hr contractor getting an offer to convert to $120,000 salary. At 45 hours/week, the salary is $51/hr effective. The contractor runs the full comparison including employer contributions and concludes the $14/hr gap means the benefits package must be worth at least $29,000 annually to break even — and it is not.
- Hourly worker evaluating a first salaried role — A $22/hr retail supervisor offered $52,000 salaried. With 48 real working hours per week and zero overtime pay, the effective rate drops to $21/hr — but the employer health insurance adds back $7,200. The net comparison is nearly identical, making career opportunity the deciding factor.
- Manager auditing team compensation equity — A team lead wants to verify that salaried team members are not effectively earning below minimum hourly alternatives. Running each salary through the true hourly calculation with actual reported hours surfaces two roles where heavy overtime has pushed the effective rate below what hourly peers earn.
Key terms
- True hourly rate
- Annual salary divided by actual hours worked per year — the real per-hour value of a salaried position once unpaid overtime is factored in.
- Total compensation
- The sum of cash pay, employer-paid benefits, retirement contributions, and paid time off. A more complete basis for comparing job offers than base salary or hourly rate alone.
- FLSA overtime eligibility
- Under the Fair Labor Standards Act, non-exempt (typically hourly) employees must be paid 1.5x their base rate for hours above 40 per week. Salaried exempt employees are not entitled to overtime pay under federal law.
- Benefits gap
- The dollar difference in benefits value between two compensation packages — the portion of total compensation that does not appear on the offer letter but affects your true take-home value.
Frequently asked questions
How do I value my employer's health insurance contribution?
Ask HR for the employer's monthly premium contribution toward your coverage tier (single, employee plus spouse, or family). Multiply by 12 for the annual figure. If your employer pays $500/month toward a family plan, enter $6,000. Do not enter the total plan premium — only the portion the employer pays.
What counts as unpaid overtime in the salary calculation?
Any hours beyond 40 per week for which you receive no additional pay. This includes regular after-hours email work, weekend calls, early starts before your scheduled shift, and expected crunch periods. If your role genuinely averages 40 hours, enter 40 — but be honest. Most salaried exempt roles in the US run 43–50 hours in practice.
How is the Salary True $/hr calculated?
The tool takes annual salary and divides by actual worked hours per year, where worked hours equals weeks per year times actual hours per week minus PTO days times daily hours. The result is the effective hourly rate for the salary — what you actually earn per hour of real time spent at work.
Should I include the full PTO value or just vacation?
Enter all paid days off: vacation days, company holidays, floating holidays, and sick days. All of these reduce worked hours for the same annual salary, which raises your effective hourly rate. If your offer includes 15 vacation days, 10 federal holidays, and 5 sick days, enter 30 total PTO days.