Hourly Wage

How It Works

Hourly wages are the dominant pay structure for non-exempt workers (those covered by FLSA overtime protections). The federal minimum wage has been $7.25/hour since 2009, though 30+ states and many cities set higher minimums (some exceeding $15/hour). To convert hourly to annual: multiply by 2,080 (40 hours × 52 weeks). A $25/hour wage equals approximately $52,000 annually, though actual annual earnings depend on hours worked, overtime, and paid time off. BLS Occupational Employment and Wage Statistics (OEWS) reports wages in both hourly and annual formats. Hourly workers receive overtime pay (1.5x regular rate) for hours exceeding 40 per week under the FLSA. Some roles that are traditionally salaried (exempt) have been reclassified to hourly following DOL rule changes raising the salary threshold for overtime exemption. When comparing hourly and salaried positions, remember that hourly workers may earn more through overtime but have less predictable income and often receive fewer benefits.

Related Terms

• Base Salary — The fixed amount of money an employee earns before bonuses, benefits, overtime, or other additional compensation — the guaranteed floor of your total pay.
• Overtime Pay — Compensation at 1.5 times the regular hourly rate for hours worked beyond 40 in a workweek — required by the Fair Labor Standards Act for non-exempt employees.
• Median Salary — The middle point of all salaries for a given role — half of workers earn more, half earn less. More useful than average salary because it isn't skewed by extremely high or low earners.