Hourly Rate Calculator
Convert between annual salary and hourly rate. Perfect for freelancers, contractors, and employees worldwide with contractor mode and rate comparison.
Enter salary to find hourly rate
Show day rate & client cost
Standard: 37.5-40 hours
UK minimum: 5.6 weeks
Why Your Hourly Rate Matters More Than Your Salary
Your salary is a headline number, but your hourly rate tells the real story. Two people earning £40,000 a year could have wildly different hourly rates if one works 37.5 hours with 28 days holiday and the other works 45 hours with 20 days off. The first earns roughly £20.50/hour. The second earns about £16.60/hour.
This distinction matters even more for freelancers and contractors. An employed person's £40,000 salary comes with sick pay, pension contributions, employer NI, and holiday pay baked in. A contractor needs to charge significantly more per hour to match the same total compensation.
The industry rule of thumb: multiply the equivalent hourly employee rate by 1.3–1.5x to get a fair contractor rate. That accounts for the lack of benefits, admin time, business insurance, equipment, and the risk of gaps between contracts.
UK Salary to Hourly Rate Quick Reference
| Annual Salary | Hourly (37.5h) | Hourly (40h) | Day Rate |
|---|---|---|---|
| £25,000 | £14.35 | £13.45 | £107.60 |
| £30,000 | £17.22 | £16.15 | £129.12 |
| £40,000 | £22.96 | £21.53 | £172.16 |
| £50,000 | £28.70 | £26.91 | £215.20 |
| £60,000 | £34.44 | £32.30 | £258.24 |
| £75,000 | £43.05 | £40.37 | £322.80 |
| £100,000 | £57.40 | £53.83 | £430.40 |
What this means for you: These figures assume 46.4 working weeks per year (52 weeks minus 5.6 weeks UK statutory holiday). Your actual rate depends on your specific working hours and holiday entitlement. The calculator above lets you adjust both.
Contractor Day Rates by Sector
| Sector | Junior Day Rate | Mid Day Rate | Senior Day Rate |
|---|---|---|---|
| Software Development | £300–400 | £450–600 | £600–900 |
| Data / Analytics | £350–450 | £500–650 | £650–850 |
| Project Management | £300–400 | £400–550 | £550–750 |
| Design (UX/UI) | £250–350 | £350–500 | £500–700 |
| Finance / Accounting | £300–400 | £400–600 | £600–900 |
What this means for you: London rates are typically 10–20% higher. IR35 inside contracts command lower day rates (roughly 60–80% of outside-IR35 equivalents) because the client handles tax and NI obligations.
Employee vs Contractor: The Hidden Cost Gap
What Employees Get "Free"
Employer pension contributions (3%+), employer NI (13.8%), paid holiday (5.6 weeks), sick pay, maternity/paternity pay, training budget, equipment, and employment rights. The true cost to an employer is typically 1.2–1.4x the gross salary.
What Contractors Must Cover
Professional indemnity insurance, public liability, accountant fees, business banking, equipment, software licences, pension contributions, holiday fund, and gaps between contracts. These typically add 20–40% to your base rate.
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How to use this tool
Enter your annual salary or hourly rate
Adjust weekly hours and holiday entitlement
View your rate breakdown across all time periods
Common uses
- Converting annual salary to hourly rate for job comparisons
- Working out your contractor or freelance day rate
- Comparing part-time vs full-time compensation
- Calculating the impact of unpaid overtime on your real hourly rate
- Benchmarking your rate against industry averages
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