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How to calculate an hourly rate in Excel and Google Sheets
Topic:Finance basicsExcel & Google Sheets
=A2/(B2*C2)✓
Verified example
Computed by a real spreadsheet engine on the sample data below.
| Annual Salary | Hours/Week | Weeks/Year | Hourly Rate |
| 52000 | 40 | 52 | |
| 75000 | 40 | 52 | |
| 36000 | 30 | 52 | |
| 100000 | 45 | 50 |
=A2/(B2*C2)→25
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Step by step
- 1Set up three columns: Annual Salary (A), Hours per Week (B), and Weeks per Year (C, typically 52).
- 2In the Hourly Rate column, enter =A2/(B2*C2). This divides the annual salary by the total annual hours worked.
- 3Format the result as Currency. For example, a $52,000 salary at 40 hours/week × 52 weeks = $25.00/hour.
Tips
- To go the other direction — annual salary from hourly rate — multiply: =A2*B2*C2 where A2 is the hourly rate.
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Frequently asked
Should I include vacation time when calculating hourly rate?
For a true effective rate, subtract paid time off from weeks worked (e.g., use 50 weeks if 2 weeks are vacation), giving a higher hourly rate.
How do I account for overtime in my hourly rate calculation?
Add overtime hours separately and multiply by 1.5x the base rate, then divide the total annual pay by total hours (regular + overtime).
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