Hourly rate is the amount of pay earned for each hour worked. It can be quoted directly for hourly workers or calculated from annual salary, weekly hours and paid working weeks.
Hourly rate formula
To work out hourly rate from annual salary, divide the salary by the number of paid working hours in the year.
hourly rate = annual salary ÷ (weekly hours × paid weeks per year)
£30,000 salary ÷ (37.5 hours × 52 weeks) = about £15.38 per hour.
Hourly rate from salary
Salaried jobs are often advertised as an annual gross salary, not an hourly wage. To compare a salary with hourly work, overtime or another job offer, convert it into an hourly rate.
Headline gross salary before deductions.
Contracted or realistic working hours.
Approximate gross hourly equivalent.
Convert salary to hourly pay
Use annual salary, weekly hours and paid weeks to estimate hourly value.
Gross hourly rate vs net hourly rate
Hourly rate is usually quoted as gross pay before tax and deductions. Net hourly rate is the after-deduction equivalent based on net pay.
Gross hourly rate
Pay per hour before Income Tax, National Insurance, pension and other deductions.
Net hourly rate
Approximate take-home pay per hour after payroll deductions.
Estimate take-home hourly value
Use take-home pay and working hours to understand after-tax hourly value.
Hourly rate and overtime
Overtime is often calculated from an hourly rate. A contract may say overtime is paid at the normal hourly rate, time and a half, double time or another rate.
| Overtime wording | Multiplier | Example at £15/hour |
|---|---|---|
| Plain time | 1.0× | £15.00/hour |
| Time and a half | 1.5× | £22.50/hour |
| Double time | 2.0× | £30.00/hour |
Calculate overtime pay
Estimate overtime earnings from hourly rate, extra hours and multiplier.
Hourly rate vs day rate
Contractors and freelancers may quote a day rate instead of an hourly rate. To compare the two, divide day rate by the number of working hours in the day.
hourly equivalent = day rate ÷ hours worked per day
A £400 day rate over 8 hours is equivalent to £50 per hour before tax and business costs.
Compare day rate and salary
Convert day rate into annual, monthly, weekly or hourly equivalents.
Why hourly rate matters
Hourly rate matters because it gives a clearer view of pay compared with the time required. A higher annual salary is not always better if it also requires many more hours.
- Job offers: compare annual salary against contracted and realistic hours.
- Overtime: calculate extra pay from hourly value and multiplier.
- Part-time work: compare different hours and pay patterns.
- Freelance work: compare day rate, hourly rate and annual equivalent.
- Budgeting: understand what extra hours are really worth after deductions.
Calculate hourly rate
The salary-to-hourly calculator converts annual salary into hourly, daily, weekly and monthly equivalents. You can adjust hours and paid weeks to reflect your working pattern.
Work out your hourly rate
Convert salary to hourly pay and compare job offers more clearly.
Hourly rate FAQs
What is an hourly rate?
Hourly rate is the amount of pay earned for each hour worked.
How do I calculate hourly rate from salary?
Divide annual salary by weekly hours multiplied by paid working weeks in the year.
Is hourly rate before tax?
Hourly rate is usually quoted before tax and deductions. Net hourly rate is the after-tax equivalent.
Why is hourly rate useful for job offers?
It helps compare pay against time. A higher salary may not be better if it requires significantly longer hours.