How to Calculate Your Salary Per Hour

The basic calculation

Divide your annual salary by the number of paid hours you work in a year.

• Hourly rate = annual salary ÷ (weeks per year × hours per week)
• Example: 60,000 over 52 weeks at 40 hours = 60,000 ÷ 2,080 = 28.85 per hour
• The standard full-time year is 2,080 hours.

Why 2,080 hours is often wrong

The 2,080-hour year assumes you work every single week. Most people do not — annual leave, public holidays and unpaid breaks all reduce the hours you are actually paid for, or the hours you actually work.

Notice that the package with fewer paid hours produces the higher hourly rate: the same salary over fewer hours means more per hour. That is the number to compare when weighing two offers.

Gross vs take-home

The figure above is gross. To get what actually reaches your account, subtract income tax, social security or national insurance, pension contributions and any other deductions.

A quick estimate: divide your take-home pay by the same hours figure. If 60,000 gross becomes 45,000 after deductions and you work 1,920 hours, your real hourly rate is 23.44.

Remember the hours you do not invoice: commuting, unpaid overtime, and evening email all reduce your effective hourly rate even though they do not appear on a payslip.

For freelancers and contractors

Start from the income you want, add unpaid time (holidays, sick days, admin, business development), then add your business costs and tax.

• Billable hours are typically 60–70% of working hours once admin and sales are counted.
• Divide your required income by billable hours, not by total hours worked.
• Add a margin for risk: no sick pay, no pension, no paid leave.