People often annualize compensation incorrectly by mixing base and overtime without structure.
Core concept
Base hourly rate applies to standard hours.
Overtime often applies at 1.5× (jurisdiction-dependent).
Total pay = base pay + overtime pay.
Example
Base: $25/hour
Standard: 40 hrs
Overtime: 8 hrs at 1.5×
Weekly gross = (40 × 25) + (8 × 37.5)
= $1,000 + $300
= $1,300
If you compare this to a flat salary offer, ensure the same expected hours are modeled.
3 takeaways
Use separate lines for base and overtime.
Convert to weekly first, then annualize.
Overtime volatility increases planning risk even when total pay is higher.
Try scenarios quickly:
https://salaryswitch.pages.dev