Hourly vs Salary: How to Compare Job Offers in 2026

Start from real hours, not the 2,080 default

The standard conversion — hourly rate × 2,080 hours — assumes 52 paid 40-hour weeks. Salaried roles usually include paid vacation; hourly roles often do not. A $38 hourly offer at 50 paid weeks is $76,000, not $79,040. Price the actual calendar: unpaid weeks, typical unpaid overtime expectations, and seasonal hours.

Put a number on overtime

Non-exempt hourly employees earn 1.5× after 40 hours under the FLSA; some states add daily overtime. If an hourly offer realistically includes 6 overtime hours a week at $38, that is $11,547 of annual OT value a salary comparison must credit. Conversely, a salaried exempt role at the same total pay that expects 50-hour weeks is effectively paying a lower hourly rate — divide salary by actual expected hours to see it.

• Annualize: hourly × weekly hours × paid weeks
• Add expected overtime at 1.5× (2× where applicable)
• Subtract unpaid time the salary would have covered
• Value benefits differences: 401(k) match, health premiums, PTO

Taxes treat them nearly the same

Both pay types face identical 2026 federal brackets, FICA and state income tax — hourly pay is not taxed at a higher rate, a persistent myth. The real tax difference appears with 1099 contracting, where the full 15.3% self-employment tax replaces the employer half of FICA.

A worked example

Offer A: $75,000 salary, 15 PTO days, 5% 401(k) match. Offer B: $38/hour, 40 hours, 48 paid weeks, no PTO, 5 expected OT hours weekly. B annualizes to $38 × 40 × 48 = $72,960 plus OT of $38 × 1.5 × 5 × 48 = $13,680 — $86,640 gross before accounting for B's unpaid time off and both offers' benefit gaps. Run both through a take-home calculator at your state before deciding; the ranking flips by state.