What unpaid overtime really costs your hourly rate

A job posting quotes an annual salary, but the number that actually reflects what an hour of your time is worth depends on something the posting never mentions: how many hours a week the job really takes.

The formula

Hourly rate = annual salary ÷ (hours per week × weeks per year). It's the same division whether you're checking your own job or comparing two offers — the only variable that changes the answer is how many hours actually go into the job.

A real example: what extra hours do to your rate

Take a $65,000 salary, paid for 52 weeks a year.

1. At a 40-hour week: 65,000 ÷ (40 × 52) = 65,000 ÷ 2,080 = $31.25 an hour.
2. At a 50-hour week — the same job, but with an extra hour a day — the same $65,000 covers more hours: 65,000 ÷ (50 × 52) = 65,000 ÷ 2,600 = $25.00 an hour.

The salary didn't change; the effective hourly rate dropped by $6.25, or 20% (6.25 ÷ 31.25 = 0.20), purely because the job now takes 10 more hours a week to do. That's the mechanism behind "salaried employees don't get paid overtime" — the extra hours aren't unpaid in the sense of missing from the paycheck; they're unpaid in the sense that they dilute every dollar the salary was supposed to cover.

Comparing two job offers the right way

The trap is comparing raw salaries when the expected hours differ. Say Offer A pays $70,000 for a role that runs a standard 40-hour week, and Offer B pays $75,000 — a bigger number — but the role realistically runs 45 hours a week.

1. Offer A: 70,000 ÷ (40 × 52) = 70,000 ÷ 2,080 ≈ $33.65 an hour.
2. Offer B: 75,000 ÷ (45 × 52) = 75,000 ÷ 2,340 ≈ $32.05 an hour.

Offer B pays $5,000 more a year on paper, but Offer A pays more per hour actually worked — $33.65 versus $32.05, a $1.60 gap. Whether that matters depends on what you value; the point is that the raw salary alone doesn't tell you, and the hourly conversion does.

Why exempt roles don't correct for this

Hourly workers who go over 40 hours typically get 1.5× pay for the overage, which pushes their effective rate up, not down. Salaried employees classified as exempt from overtime rules generally don't — the annual figure is fixed regardless of whether the job takes 40 hours a week or 50, so every hour beyond the expected load quietly lowers the effective rate instead of raising it.

What this doesn't capture

This is a gross-pay-per-hour comparison only. It leaves out benefits, PTO, commute time and how predictable the hours actually are week to week — a $31.25/hour job with fixed 40-hour weeks and a $31.25/hour job with unpredictable 35-to-55-hour weeks are not the same job, even though the math above treats them identically.

Run your own numbers

The free Salary → Hourly calculator runs this instantly for your real salary and hours — entirely on your device — so you can plug in the hours a role actually takes, not just the hours it's supposed to take.