Lesson
Hourly wages versus salaries
- Published:
- October 12, 2026
- Review status:
- Needs verification — carefully written, not yet checked by a qualified professional
Needs verification
- The current federal salary threshold for overtime exemption.
We left these specific numbers out until they're checked against current official sources.
AThe super simple explanation
Hourly workers are paid for each hour they work.
Salaried workers get a set yearly amount, divided into equal paychecks.
Whether you get overtime depends on how the law classifies your job — not just whether you're salaried.
BWhy does this even matter?
- It affects how much you earn when you work extra.
- It helps you compare job offers fairly.
- It helps you notice if you might be misclassified.
COkay, how does it work?
Pay = hours × rate, plus overtime for eligible hours.
DShow me an example
Converting (illustrative)
$20/hour × 2,080 hours ≈ $41,600 a year before taxes.
A $50,000 salary ÷ 2,080 ≈ $24/hour.
Illustrative example with made-up people and numbers — not current rates or rules.
EWords you should know
- Non-exempt
- Eligible for overtime under the FLSA.
- Exempt
- Not eligible for overtime because the job meets specific legal tests.
- Overtime
- Extra pay — at least 1.5× the regular rate — for eligible hours over 40 in a workweek.
FCommon mistakes
- Assuming all salaried workers can't get overtime.
- Comparing an hourly offer to a salary offer without converting.
- Ignoring benefits when comparing offers.
GQuestions people are too embarrassed to ask
HQuiz me
Totally optional. Nobody's grading you.
IWhat next?
Ready to do it?
Walk me through: Understand your first paycheck
Walk me through: Understand your first paycheck
- 1.Check whether your job is exempt or non-exempt.
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