Finance Pay

Salary to hourly

Annual salary
That figure is
Hours per week
Paid weeks per year
52 if holiday is paid
Hourly 28.85
60000 ÷ (40 h × 52 weeks)
Daily 230.77
Weekly 1,153.85
Every two weeks 2,307.69
Monthly 5,000
Annual 60,000
Gross · before tax and deductions

Using 52 weeks assumes holiday is paid, which for a salaried employee it is. A contractor comparing against that salary should use their actual billable weeks — perhaps 46 after holiday, illness and gaps between contracts — which raises the hourly rate needed to match the same annual income by about 13%. Comparing a contract rate against a salary on 52 weeks understates what the contractor needs to charge.

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Hourly rate is annual salary divided by hours per week times weeks per year. Sixty thousand over 40 hours and 52 weeks is 28.85 an hour, 1,153.85 a week and 5,000 a month before tax.

How to convert salary to hourly

1 Enter the annual salary before tax.
2 Set your contracted hours per week.
3 Use 52 weeks if holiday is paid, or your billable weeks if not.
4 Read the hourly, daily, weekly and monthly figures together.

This conversion flatters salaried work in one direction and contracting in the other. A salary carries paid holiday, sick leave, pension contributions and often insurance, none of which appear in the hourly figure. A contractor charging the same nominal rate has to fund all of those out of it, plus the unbilled weeks. A rough industry heuristic puts the equivalent contract rate at 1.3 to 1.5 times the naive hourly conversion — and the freelance rate calculator works that through properly.

Questions

Divide the annual salary by hours per week times weeks per year. 60,000 over 40 × 52 is 28.85.

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