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Summary
The hourly rate calculator converts between annual salary, monthly pay, weekly pay, daily rate, and hourly rate. The conversion accounts for standard working hours and UK statutory holiday entitlement. It also calculates your net (after-tax) hourly rate, which is the true value of each hour worked.
How it works
Basic conversion
The fundamental calculation divides annual salary by total working hours per year:
Hourly rate = Annual salary / (Working hours per week x Working weeks per year)
Working weeks
A standard UK full-time employee works 52 weeks per year but receives paid holiday. The statutory minimum is 28 days (5.6 weeks) for a 5-day-per-week worker, including bank holidays. So the number of weeks actually worked is:
- Total weeks: 52
- Holiday weeks: 5.6 (statutory minimum)
- Actual working weeks: 46.4
However, since holidays are paid, the salary already accounts for them. The hourly rate should be calculated using all 52 weeks (because you are paid for holiday weeks too):
Gross hourly = Annual salary / (Hours per week x 52)
For a £40,000 salary with 37.5 hours/week:
- £40,000 / (37.5 x 52) = £40,000 / 1,950 = £20.51/hour
Net hourly rate
Dividing your annual take-home pay by total hours gives your net hourly rate — what each hour of work actually puts in your bank account:
Net hourly = Annual net pay / (Hours per week x 52)
Day rate conversion
For contractors or freelancers, the daily rate is:
Day rate = Annual salary / Working days per year
Typically: 365 - 104 weekend days - 28 holiday days = 233 working days
Worked example
Salary: £50,000, 37.5 hours/week
- Gross hourly: £50,000 / (37.5 x 52) = £25.64/hour
- Annual net pay (approx): £37,486
- Net hourly: £37,486 / 1,950 = £19.22/hour
- Day rate equivalent: £50,000 / 233 = £214.59/day
Inputs explained
- Annual salary — gross salary before deductions
- Hours per week — your contracted working hours (UK full-time standard is 37.5 or 40)
- Days per week — typically 5 for full-time
- Holiday days — paid holiday entitlement (minimum 28 including bank holidays)
Outputs explained
- Gross hourly rate — your pay per hour before tax
- Net hourly rate — your pay per hour after tax and NI
- Day rate — useful for comparing with contractor roles
- Weekly / monthly equivalents — for budgeting across different timeframes
Assumptions & limitations
- The calculation uses contracted hours, not actual hours worked. If you regularly work overtime (unpaid), your effective hourly rate is lower.
- UK statutory holiday minimum is 28 days for full-time workers (pro-rated for part-time). Many employers offer more.
- Does not account for unpaid breaks — if your 8-hour day includes a 1-hour unpaid lunch, your actual working hours are 7, which changes the rate.
- The net hourly rate is based on a standard PAYE tax calculation and may differ if you have multiple income sources or non-standard deductions.