Comparing pay that is quoted differently
Job offers arrive in inconsistent units. One role quotes an hourly rate, another a monthly figure, a contract quotes a day rate. Comparing them requires converting to a common basis, and doing that badly leads people to accept worse offers than they realise.
This calculator converts in every direction from whichever figure you have, using your actual working pattern rather than assumptions.
Why the working pattern matters
The conversion depends entirely on hours worked, and small differences compound. A role at forty hours a week and one at thirty-seven and a half look similar but differ by more than six percent in hourly terms for the same salary.
Paid weeks per year matters just as much. Salaried employees are typically paid for all fifty-two weeks including holiday. Contractors and hourly workers usually are not — someone taking four weeks unpaid leave is paid for forty-eight, so their effective annual figure is roughly eight percent below the naive calculation.
This is the single most common error when contractors compare their day rate against a salaried role. Adjust the paid weeks figure to reflect reality before comparing.
Overtime
Time and a half is the most common overtime rate, with double time for unsocial hours or public holidays in many agreements. Entitlement varies considerably by jurisdiction and by employment classification — salaried employees above a certain threshold are often exempt from overtime requirements entirely.
Regular overtime is worth calculating explicitly, because a role with a lower base rate and reliable overtime can pay more than one with a higher base and none.
What this does not include
These are gross figures. Take-home pay depends on income tax, national insurance or social security contributions, pension deductions and any local taxes, and these vary so much by country and circumstance that a general calculator would be misleading rather than helpful.
Total compensation also extends well beyond salary. Employer pension contributions, health insurance, paid leave, bonuses and equity can be worth a substantial fraction of base pay. A role paying ten percent less with markedly better benefits may leave you better off, and comparing only the headline figure misses that.
A note on contract rates
Contractors carry costs employees do not — no paid leave, no sick pay, no employer pension contribution, plus their own insurance and accounting. A day rate that looks generous against a salary often is not once those are accounted for. The commonly used rule of thumb is that a contract rate needs to be meaningfully higher than the equivalent salary to be comparable.
Not financial advice
This performs arithmetic on the figures you enter. It is not tax or financial advice. Calculation happens entirely in your browser and nothing is transmitted.
Frequently Asked Questions
How do I convert an hourly rate to an annual salary?
Multiply by hours per week, then by paid weeks per year. Using 52 weeks assumes you are paid for holiday; contractors usually are not.
Why does paid weeks per year matter?
Salaried staff are typically paid for all 52 weeks including leave. Someone taking four weeks unpaid is paid for 48, roughly eight percent less.
Does this show take-home pay?
No. These are gross figures. Tax and social contributions vary so much by country and circumstance that a general calculator would mislead.
How does contract pay compare to a salary?
Contractors have no paid leave, sick pay or employer pension, plus their own insurance and accounting costs, so a contract rate needs to be meaningfully higher to be comparable.
What overtime rate should I use?
Time and a half is most common, with double time for unsocial hours. Entitlement varies by jurisdiction and employment classification.