Salary vs Hourly: Which Actually Pays More After Taxes

A friend of mine was offered two jobs last year. One paid $70,000 salary. The other paid $35 per hour. He asked me which was better and I told him the answer was not as obvious as he thought. When you break both options down to an hourly rate, factor in overtime potential, add back benefits, and run the tax numbers, the comparison gets surprisingly close. Sometimes the hourly role wins. The Baseline Math A standard full-time work year is 2,080 hours. That is 40 hours per week times 52 weeks. A $70,000 salary divided by 2,080 hours gives you an effective hourly rate of $33.65. The hourly worker at $35 per hour, working a straight 40-hour week for 52 weeks, earns $72,800 gross. Already slightly more than the salaried position. But this is just the starting point. The Overtime Factor Salaried employees classified as exempt under the FLSA do not receive overtime pay. When your boss asks you to stay late or finish something over the weekend, you earn the same $70,000 whether you work 40 hou