Salary calculator
Every figure here is gross, before tax and deductions. On the freelance rate, tax rates and social contributions vary enormously by country and structure, so use your own effective rate and talk to an accountant before setting a rate you will live on.
Every pay period converts through the annual figure. Sixty-five thousand a year is 5,417 a month, 2,500 biweekly, 1,250 a week and 31.25 an hour on a 40-hour week, before tax. It runs backwards too: 25 an hour is 52,000 a year, and a 55,000 freelance take-home needs a rate of 82.59 an hour once expenses, unbillable time and tax are worked back through.
How to convert between pay periods
The shortcut worth carrying around is that an hourly rate times two thousand gives the approximate annual salary for full-time work, because forty hours over fifty weeks is exactly two thousand hours. Twenty-five an hour is roughly fifty thousand a year; forty an hour is roughly eighty. It is close enough for a first comparison, and it is why an hourly wage and a yearly salary get quoted as though they were interchangeable. The benefits attached to one and not the other mean they rarely are.
Pay periods are four different rhythms
Biweekly means 26 payments a year, so two months in every year contain three paydays. Semi-monthly means 24, always on fixed dates. Weekly means 52 and monthly means 12. The annual total is the same across all of them; the cash-flow pattern is not, and a budget built on the assumption of two paydays a month breaks twice a year on a biweekly schedule. Biweekly is also the most common arrangement by some distance: when the Bureau of Labor Statistics measured it across private establishments, 43.0% paid biweekly, 27.0% weekly, 19.8% semi-monthly and 10.3% monthly. Moving between employers on different schedules is where this catches people.
Hours and weeks move the answer more than the salary does
A 37.5-hour week raises the hourly equivalent of the same salary by about 6.7% against a 40-hour week. Dropping from 52 paid weeks to the 46 a self-employed person actually works adds another 13% on top of that. Both fields are editable here for exactly that reason, and leaving them at the default is the commonest way two offers get compared on figures that were never equivalent.
Why a freelance rate is not a salary divided by 2,080
Three deductions compound on the way from a rate to a take-home, and the panel starts from a working assumption for each rather than a published figure, because no agency publishes one: about 60% of available hours billable once sales, quoting, invoicing, chasing payment and bookkeeping are taken out; about 46 weeks worked once holiday, illness and gaps between contracts are counted; and roughly a third of what is left going to tax and contributions. All three are editable, and they should be edited — they are the assumptions, not findings. Taken together as set, an hourly rate needs to be somewhere near two and a half times the naive salary-to-hourly conversion to produce the same income.
A salary also carries paid holiday, sick leave, pension contributions and often insurance, none of which appear anywhere in an hourly figure. A contractor charging the same nominal rate funds all of that out of it, plus the unbilled weeks. The rough industry heuristic puts an equivalent contract rate at 1.3 to 1.5 times the naive conversion, and the target take-home mode works it through properly. Setting a rate by looking at what other people charge, without doing this arithmetic, is how experienced freelancers end up earning less than they did employed.
What people use it for
- Comparing job offers quoted in different periods
- Converting an annual salary into an hourly rate
- Working out annual income from an hourly or shift rate
- Setting a freelance or contract rate before quoting
- Budgeting from a biweekly pay schedule
- Checking a part-time pro-rata offer
Questions
Multiply by 12 for the yearly figure. Do not multiply weekly pay by four. There are 52 weeks in a year, not 48.
Divide the annual salary by hours per week times weeks per year. 60,000 over 40 × 52 is 28.85.
52,000 for a 40-hour week over 52 weeks, before tax.
Hourly rate × 2,000. Forty hours over fifty weeks is exactly 2,000 hours, which makes it close enough for a first look.
52 if your holiday is paid. Use the weeks you actually work if you are self-employed or take unpaid time off.
Change the hours field. It raises the hourly rate for the same salary by about 6.7% against a 40-hour week.
2,080 for a 40-hour week over 52 weeks. That is the figure behind the hourly conversion.
Every two weeks, so 26 payments a year. Two months each year contain three paydays.
No. Semi-monthly is twice a month, 24 payments a year on fixed dates. Biweekly is 26. The annual total matches; the individual payments do not.
Gross, before tax and deductions. Use the paycheck calculator for take-home.
Yes. Enter the full-time salary and your actual hours per week; the hourly figure is unchanged and every period below it scales down.
Take-home plus expenses, grossed up for tax, divided by the hours you can actually bill in a year.
Because it funds holiday, sickness, pension, equipment, insurance and downtime that an employer would otherwise cover. Adding 30 to 50 per cent to a salary-derived hourly figure is the usual starting point.
Around 60% for a busy freelancer. Sales, admin, invoicing and marketing take the rest.
About 46, allowing for holiday, illness and gaps between contracts.
Day rates are simpler for longer engagements and reduce quibbling over hours. The underlying arithmetic is the same, and the day rate is shown alongside.