How to calculate hourly rate from salary in Excel

Step 1: Salary to hourly

A full-time year is often taken as 40 hours x 52 weeks = 2,080 hours. 58,000 / 2,080 = 27.8846, so Priya earns about 27.88 an hour before deductions.

Don't hard-code 2,080. People work different hours: Marcus is on 37.5 a week, so his 72,500 works out to 37.18 an hour, not the 34.86 you'd get from 2,080. Keep hours per week in its own column and paid weeks in an input cell, G2.

The brackets matter. =B2/C2*52 divides by the hours and then multiplies by 52, giving 75,400, a nonsense hourly rate. =B2/(C2*$G$2) divides by the total hours, which is what you want.

Step 2: Hourly to salary, and comparing offers

Going the other way is a multiplication. A 29.50 hourly offer at 40 hours a week for 52 weeks is =G3*G4*G2, or 61,360 a year.

Now compare that with a 62,000 salary that expects 45 hours a week. Per hour, the salary pays =ROUND(62000/(45*52),2) = 26.50. The salary looks bigger, but the hourly job pays 3.00 more for every hour you actually work. Put both offers side by side with their real expected hours before you decide.

This is gross pay only. Overtime rules, benefits and taxes vary a lot, so add them as your own rows if they matter to the comparison.

Step 3: Paid weeks for contractors and unpaid time

An employee on salary is usually paid for all 52 weeks, holidays included. A freelancer isn't. If you expect 48 billable weeks after holidays and gaps between clients, put 48 in G2.

To earn the same 58,000 over 48 weeks of 40 hours, you'd need =ROUND(B2/(C2*48),2) = 30.21 an hour. That's why contract rates look higher than salaries for the same work.

Some employers use slightly different yearly hours, such as 2,087 or the actual workdays in that year. If you need the exact figure your payroll uses, ask for their divisor and put it in the input cell.

Step 4: Monthly, biweekly and weekly pay

Divide the annual salary by the number of pay periods: 12 for monthly (4,833.33), 26 for biweekly (2,230.77), 24 for semi-monthly (2,416.67) and 52 for weekly (1,115.38). Wrap each in ROUND(...,2) so it shows cents, not a long decimal.

Biweekly and semi-monthly aren't the same. Biweekly is every two weeks, 26 paychecks a year, so a couple of months have three paydays. Semi-monthly is twice a month on set dates, 24 paychecks.

Step 5: Part-time and FTE

FTE (full-time equivalent) compares someone's hours with a full-time week. Jen works 24 hours where full time is 40, so her FTE is =C4/40, which is 0.6.

Her 31,200 salary works out to 25.00 an hour. The full-time equivalent salary is =B4/(C4/40) = 52,000, which is the number to compare when you're checking pay across full- and part-time roles.

If you round the hourly rate and multiply back, you won't land exactly on the salary: 27.88 x 40 x 52 is 57,990.40, 9.60 short of 58,000. For exact yearly totals, keep the unrounded rate and round only what you show.