Salary ↔ Hourly ↔ Day Rate Converter

How to use it

Choose what you are converting from — a salary, an hourly rate or a day rate — and enter it, then set the hours in a day, the working days in a year and the paid leave. The result gives every equivalent, on paid days and on days actually worked, with and without employer on-costs.

Where the number comes from

• An hourly or day rate entered here is treated as employee pay for every paid day, leave included, so the annual salary is the rate times paid hours or paid days.
• Days worked are the working days in the year less paid leave and public holidays.
• Paid-basis rates divide the salary by all paid days or hours; worked-basis rates divide by days or hours actually worked. Monthly is a twelfth of the year and weekly a fifty-second.
• Loaded cost adds employer on-costs to pay. The contractor-equivalent day rate is the loaded annual cost divided by the days worked.

What goes wrong

The part most calculators leave out.

• Mixing bases is the common mistake. An hourly rate from a salary divided by paid hours is lower than one divided by hours worked, and comparing one with the other overstates the gap by the share of days taken as leave.
• Paid hours per day are taken as fixed. Salaried staff who routinely work longer earn less per hour actually worked than the figures here show.
• Monthly and weekly pay assume equal instalments. Payroll that pays per hour worked, or in four-weekly cycles, gives months of different sizes.
• The contractor-equivalent rate matches cost per day worked only. It leaves out what a contractor carries themselves — gaps between engagements, their own equipment and insurance — and what an employer avoids, such as notice periods and training.
• A flat on-cost rate is an approximation. Payroll taxes with thresholds or caps make the true loading differ between a low and a high salary.

Questions

How do I convert a salary to an hourly rate?

Divide the annual salary by the hours paid in a year. With 260 working days of 7.5 hours that is 1,950 hours, so 60,000 a year is about 30.77 an hour. Dividing by hours actually worked, after leave and holidays, gives a higher figure.

Why are contractor day rates so much higher than salary ÷ 260?

Two reasons. A contractor is paid only for days worked, so the same income has to come from fewer days. And their rate has to cover what an employer would otherwise pay on top of salary — taxes, pension, benefits — plus gaps between contracts.

Should I divide by 260 or by days worked?

Use paid days (usually 260) to express an employee’s pay as a day or hourly rate. Use days worked to find what each productive day actually costs, or to compare with a contractor billed only for days worked.

Does anything I type get sent anywhere?

No. The whole calculation runs in your browser. Nothing is sent to us or logged, and there is no account to create. Your browser keeps the figures with this tab’s history so that Back and Reload bring them back, and Reset clears them.