Salary ↔ Hourly Converter

The 2,080-hour convention

The standard salary-to-hourly formula is salary ÷ (52 × hours per week). At a 40-hour week that's 52 × 40 = 2,080 hours a year, the number most employers and payroll systems assume. A $85,000 salary works out to about $40.87/hour. Salaried employees are normally paid through their vacation, so paid vacation weeks don't change this divisor. What they change is time at work: the tool also shows what each hour you actually work earns, salary ÷ ((52 − vacation weeks) × hours). That figure is higher, because you're paid to be away.

Your true effective hourly rate

Salaried roles often carry unpaid overtime. Your real wage is salary ÷ (52 × (hours + unpaid OT)). Those extra hours don't raise your pay, so every unpaid hour dilutes your effective rate: 5 unpaid hours a week turns a $40.87 sticker rate into roughly $36.32, about 11% lower. Unpaid overtime only applies to fixed pay. On an hourly rate every extra hour is paid; on a day rate, enter the hours you actually work, since longer days already lower the hourly figure. Scheduled plus unpaid hours can't pass the 168 hours in a week.

What an hour at work actually earns

The bridge chart walks from the sticker rate to the pay for each hour you are actually on the job, always in the same order. Unpaid overtime first: salary ÷ (52 × (hours + unpaid OT)). Then paid vacation: salary ÷ ((52 − vacation weeks) × (hours + unpaid OT)). Each bar is the difference between two of those rates, so the bars add up exactly to the last one. At $85,000, 40 hours, 5 unpaid hours and 2 weeks off: $40.87, less $4.54 for the overtime, plus $1.45 for the vacation, gives $37.78. Statutory holidays are not counted; a paid holiday is one more day off at full pay, which would lift the per-hour figure a little further.

Hourly to salary

Going the other way, the convention figure is rate × hours per week × 52. Hourly workers usually get vacation pay instead of paid time off, so the year bridge shows what you'd actually earn if your weeks off are unpaid: rate × hours × (52 − vacation weeks) in wages, plus vacation pay on those wages. It uses Ontario's minimums: 4% with up to two weeks off, and 6% with three or more. The 6% tier applies from five years of service, the tier that comes with three weeks, so with fewer years your vacation pay is 4% and the year is a little lower. Weeks beyond three count as unpaid leave. With two weeks off, 4% buys the time back: 50 weeks of wages × 1.04 = 52 weeks of pay.

Day rates

A day rate converts at 260 workdays a year (5 × 52). Day rates usually pay only for days worked, so the year bridge takes 5 days off for each vacation week: day rate × 5 × (52 − vacation weeks). If you are an employee on a day rate, vacation pay (4% in Ontario) comes on top.

Converting between pay periods

Every period converts through the annual figure on the 52-week convention: monthly × 12, semi-monthly × 24, bi-weekly × 26, weekly × 52, daily × 260 (5 workdays × 52). Bi-weekly and semi-monthly are not the same thing: 26 paycheques vs 24, so the same salary gives a slightly smaller bi-weekly cheque, with two "three-paycheque months" a year as the offset. The per-hour figure always uses your hours per week, not an assumption.

Vacation pay: 4% and 6%

Under Ontario's Employment Standards Act, vacation pay is at least 4% of gross wages (two weeks) for under five years of service, rising to 6% (three weeks) at five years. Most provinces follow the same 4%/6% structure; Saskatchewan starts at 3 weeks (5.77%). On the hourly side the tool applies 4% with up to two vacation weeks and 6% with three or more; if your contract pays more, your actual year is higher.

Overtime in Ontario (and beyond)

Ontario pays overtime at 1.5× after 44 hours in a week. Thresholds vary: 40 hours in Manitoba and Saskatchewan, 44 in Ontario, and daily thresholds (over 8 hours/day) in BC and Alberta. This tool converts a base rate, it does not add statutory overtime premiums to your paid hours.

Gross to take-home

Every conversion here is gross pay. The paycheque chart runs your annual figure through the same engine as the income tax calculator, on employment income alone: federal tax, provincial or territorial tax (Ontario's includes its surtax and Health Premium, which payroll withholds with it), CPP and CPP2 (QPP and QPP2 in Quebec), EI, and in Quebec, QPIP. Each bar is the annual amount ÷ the cheques in a year, so it shows the average cheque, and the bars add up exactly to it. Payroll spreads income tax evenly, but CPP and EI come off every cheque only until you reach their annual maximums, so later cheques are bigger; the chart's note gives the first and last cheque of the year. The cheque follows the period you entered, or bi-weekly for annual, hourly and daily pay. It leaves out RRSP contributions, benefits, union dues and anything else on your TD1, so treat it as an estimate; the link under the chart opens the income tax calculator with your salary and province filled in.

What this doesn't model

Statutory overtime premiums, shift differentials, statutory holidays, bonuses, commission, benefits, employer pension matching, or the exact number of workdays in a given year (we use 260 = 5 days × 52 weeks for the per-day figure). It's a rate converter, not a payroll engine.