Data Source & Methodology

AuthoritativeDataSource: General convention for full‑time equivalency in HR/payroll uses 40 hours per week × 52 weeks = 2,080 hours/year. See U.S. OPM definitions and BLS guidance. If your contract differs, adjust the inputs.
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The Formula Explained

We compute an annualized pay from your input period, then divide by the effective annual working hours:

\[\text{hourly} = \frac{\text{annual\_pay}}{\text{effective\_hours\_per\_year}}\]

where

\[\text{effective\_hours\_per\_year} = (\text{weeks\_per\_year} - \frac{\text{PTO\_days} + \text{holidays}}{\text{days\_per\_week}})\times \Big(\text{hours\_per\_week} - \frac{\text{unpaid\_break\_min}}{60}\Big)\]

and annual pay depends on selected period (e.g., monthly × 12, biweekly × 26, weekly × 52, daily × working days × weeks).

Glossary of Variables

  • Pay period: Frequency of the amount provided (annual/monthly/biweekly/weekly/daily).
  • Pay amount: Gross pay before taxes and benefits for the chosen period.
  • Hours per week: Contracted work hours in a typical week.
  • Working weeks per year: Weeks you work in a year (reduce for unpaid time off if any).
  • PTO days: Paid time off days in a year.
  • Paid public holidays: National/company holidays that are paid time.
  • Unpaid break per workday: Minutes not paid (e.g., lunch) on days you work.
  • Working days per week: Days worked per week, used with breaks and PTO/holidays.
  • Effective hours/year: The denominator used to derive your hourly rate.

How It Works: A Step‑by‑Step Example

Suppose a monthly salary of €3,000, 40 hours/week, 52 weeks/year, 20 PTO days, 11 holidays, 30 minutes unpaid break per day, 5 workdays/week.

  1. Annual pay = €3,000 × 12 = €36,000.
  2. PTO + holidays = 31 days ≈ 6.2 weeks at 5 days/week.
  3. Effective weeks ≈ 52 − 6.2 = 45.8 weeks.
  4. Net hours/week = 40 − 0.5 = 39.5 hours.
  5. Effective hours/year ≈ 45.8 × 39.5 ≈ 1,809.1 hours.
  6. Hourly ≈ €36,000 / 1,809.1 ≈ €19.90/hour.

Frequently Asked Questions

Do you account for PTO and holidays?

Yes. PTO and paid holidays reduce the effective hours while annual pay stays constant, which increases the hourly rate.

Is tax withholding included?

No. This tool converts gross pay to a gross hourly rate. For take‑home pay, use our paycheck/tax calculators.

How many weeks per year should I use?

52 is standard. If you have unpaid time off, reduce the number. Alternatively, enter PTO/holidays and keep 52.

What about unpaid breaks?

Enter average unpaid minutes per working day; we subtract them from weekly hours.

Can I switch currencies?

Yes. Choose a display currency. No foreign‑exchange conversion is performed.

Does biweekly mean 26 or 27 pay periods?

We use 26 by default (52 weeks / 2). Some years have 27 paychecks; if that applies, use Weekly × 52 or adjust Monthly accordingly.

Why is my hourly higher than expected?

If you include PTO/holidays and breaks, effective hours drop, which raises the hourly rate—even though annual pay doesn’t change.

Tool developed by Ugo Candido. Content reviewed by the CalcDomain Editorial Board.
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