To figure your yearly income, multiply your hourly wage by the number of hours you work per year, or add up all income sources over a 12-month period. The method depends on how you’re paid. A standard full-time work year is 2,080 hours (40 hours per week times 52 weeks), so someone earning $20 an hour full-time makes about $41,600 a year before taxes. If your situation is less straightforward, whether you work overtime, freelance, earn commissions, or juggle multiple jobs, the math requires a few more steps.
Hourly Wage to Yearly Income
The simplest formula is: hourly rate × hours worked per year = annual income. For a full-time schedule of 40 hours per week, that means multiplying your hourly rate by 2,080. Someone making $15 an hour earns about $31,200 a year. Someone making $25 an hour earns about $52,000.
If you don’t work a standard 40-hour week, adjust the formula. Multiply the number of hours you actually work each week by 52 to get your annual hours, then multiply by your hourly rate. A part-time worker putting in 25 hours a week at $18 an hour would calculate it as 25 × 52 × $18 = $23,400.
Keep in mind that 2,080 assumes you work every week of the year with no unpaid time off. If you take unpaid vacation or have seasonal gaps, subtract those weeks before multiplying. Two weeks of unpaid leave drops your work year to 2,000 hours, which on a $20-per-hour wage means $40,000 instead of $41,600.
Overtime and Irregular Hours
If you regularly work overtime, your yearly income is higher than the base calculation suggests. Most hourly workers covered by federal labor law earn 1.5 times their regular rate for hours beyond 40 in a week. To factor overtime into your annual income, calculate your base pay and overtime pay separately, then add them together.
For example, if you earn $20 an hour and consistently work 50 hours a week, your math looks like this: 40 regular hours × $20 = $800 per week, plus 10 overtime hours × $30 (time and a half) = $300 per week. That’s $1,100 a week, or $57,200 over 52 weeks. Ignoring the overtime and just multiplying $20 by 2,080 would undercount your income by over $15,000.
If your hours fluctuate week to week, the most accurate approach is to look at your actual paychecks over several months and calculate an average weekly total, then multiply by 52.
Salary to Yearly Income
If you’re paid a salary, your yearly income is typically stated in your offer letter or employment contract. But if you only know your per-paycheck amount, reverse-engineer the annual figure by multiplying your gross pay (the amount before deductions) by the number of pay periods in a year. Most employers use one of these schedules:
- Weekly: 52 pay periods per year
- Biweekly (every two weeks): 26 pay periods per year
- Semimonthly (twice a month): 24 pay periods per year
- Monthly: 12 pay periods per year
If your biweekly gross paycheck is $2,500, your annual gross income is $2,500 × 26 = $65,000. Use the gross number on your pay stub, not the smaller amount deposited into your bank account, since the deposited amount has already had taxes and other deductions removed.
Gross Income vs. Net Income
When someone asks for your yearly income, whether on a loan application, a rental agreement, or a tax form, they usually mean gross income. Gross income is your total earnings before anything is taken out. Net income is what’s left after deductions like federal and state taxes, Social Security and Medicare taxes, health insurance premiums, and retirement plan contributions.
The gap between gross and net can be significant. Depending on your tax bracket, benefits elections, and retirement contributions, your net income might be 25% to 35% less than your gross. Someone with a $60,000 gross salary might take home around $45,000 after all deductions. When you’re budgeting, net income is the number that matters because it reflects the cash you actually receive. When you’re filling out applications or reporting income, gross is almost always what’s requested unless the form specifically says “after taxes.”
Multiple Jobs or Income Sources
If you earn money from more than one source, your yearly income is the sum of all of them. Calculate each source separately using the method that fits (hourly formula for one job, salary for another, monthly totals for freelance work), then add the results together.
Common income sources to include: wages from all jobs, freelance or gig work payments, rental income, regular investment dividends or interest, alimony or child support received, and any recurring side business revenue. If you’re calculating income for a loan or credit application, lenders generally want to see all reliable, recurring income. One-time windfalls like selling a car or receiving an inheritance typically don’t count.
Self-Employment and Freelance Income
Freelancers and self-employed workers rarely have a fixed annual number to point to. The most reliable method is to add up your total earnings over the previous 12 months. Pull this from your invoicing records, bank deposits, or the 1099 forms you receive from clients (these report what each client paid you during the tax year).
If your income varies significantly from month to month, averaging is your best tool. Add up your last 12 months of gross revenue and use that as your annual figure. If you’ve been self-employed for less than a year, add up what you’ve earned so far and divide by the number of months you’ve been working, then multiply by 12 to project the annual total. This projection is less precise, but it gives you a working estimate.
For self-employed workers, the distinction between gross revenue and actual income matters even more than for salaried employees. Your yearly income for tax purposes is your gross revenue minus business expenses. If you brought in $80,000 but spent $15,000 on equipment, software, and supplies, your net self-employment income is $65,000.
Your Total Compensation Picture
Your yearly income from paychecks may not reflect the full value of your compensation. Employer-provided benefits add real financial value that doesn’t show up in your gross pay. A 401(k) match is essentially free money added to your retirement savings. Employer-paid health insurance can be worth $7,000 to $20,000 or more per year depending on your plan and whether it covers a family. Tuition reimbursement, stock options, commuter benefits, and childcare assistance all carry dollar values.
Bonuses are another piece to consider. Performance bonuses, sign-on bonuses, and retention bonuses all count toward your total annual earnings. If you receive a predictable annual bonus, add it to your base salary for a more complete picture. If bonuses vary year to year, averaging the last two or three years gives you a reasonable estimate.
Knowing your total compensation is especially useful when comparing job offers. A position with a $70,000 salary plus a 10% annual bonus and a 5% 401(k) match is worth considerably more than a $75,000 salary with no bonus and no match.
Quick Reference Formulas
- Hourly to yearly: Hourly rate × hours per week × 52
- Weekly pay to yearly: Weekly gross pay × 52
- Biweekly pay to yearly: Biweekly gross pay × 26
- Semimonthly pay to yearly: Semimonthly gross pay × 24
- Monthly pay to yearly: Monthly gross pay × 12
- Yearly to hourly: Annual salary ÷ 2,080 (for a 40-hour week)
Whichever formula you use, start with gross pay for the most universally useful number. From there, you can estimate net income by subtracting roughly 25% to 35% for taxes and deductions, or check your pay stubs for the exact amount.