How do I convert an hourly rate to an annual salary?

Multiply the rate by weekly hours and by weeks worked per year. At £22 an hour over 37.5 hours and 52 weeks, that's £42,900 gross.

Should I use 52 weeks or fewer?

Use 52 if your holiday is paid, as it is for most employees. Use around 46 to 48 if you're a contractor taking unpaid time off, otherwise the annual figure is optimistic.

Is overtime taxed at a higher rate?

No. Overtime is ordinary earnings and taxed under the same bands. A single large month can appear over-taxed because PAYE spreads estimates across the year, but it corrects itself.

What hourly rate equals a £30,000 salary?

About £15.38 an hour at 37.5 hours over 52 weeks, or £14.42 at a 40-hour week. Enter your own hours above for an exact figure.

Does this include holiday pay?

It assumes your stated weeks are paid. If your rate includes rolled-up holiday pay, reduce the weeks figure so the comparison stays honest.

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Hourly Wage to Annual Salary Calculator

Convert an hourly rate into annual gross pay and UK take-home after income tax and national insurance.

Your hours and pay

Hourly rate (£)Hours per weekWeeks worked per yearTax yearRegion

What that adds up to

Annual take-home

£34,408

£2,867 per month

Gross annual: £42,900
Gross weekly: £825
Income tax: £6,066
National insurance: £2,426
Take-home hourly: £17.64

Where your pay goes

Take-home80%
Income tax14%
National insurance6%

Estimates only, based on published HMRC rates. Not financial advice.

Turning an hourly rate into an annual figure is simple arithmetic. Turning it into a fair comparison with a salaried job is not, and that's where most people get caught out.

How to use it

1Enter your hourly rate and the hours you work each week.
2Set weeks worked per year, 52 for salaried, fewer if holiday is unpaid.
3Read the annual gross, take-home and effective hourly figures.

The calculation

Annual gross is your hourly rate multiplied by hours per week multiplied by weeks worked per year. A full-time employee typically works 52 weeks including paid holiday, so 52 is the right figure for a salaried comparison. A contractor or freelancer who takes unpaid time off should use a lower number, 46 or 47 weeks is realistic once holiday and a little sickness are accounted for.

Once you have gross annual pay, income tax and national insurance are applied exactly as they would be on a salary. Nothing about being paid hourly changes how PAYE works.

Comparing a contract rate to a salary

A headline day or hourly rate that looks generous often isn't, because it has to cover things a salary includes for free. Paid holiday is roughly 5.6 weeks a year by statutory minimum. Employer pension contributions are typically 3% or more. Then there's sick pay, employer national insurance, and the periods between contracts when nothing is invoiced.

A rough sanity check: multiply your target salary by around 1.3 to 1.5 before dividing into a contract rate, and use fewer than 52 billable weeks. If the resulting rate is below market, the contract is worse than it looks.

Overtime, part-time and the National Living Wage

Overtime is taxed exactly like normal pay, there is no separate overtime tax rate. A large overtime month can look over-taxed on the payslip because PAYE annualises that month's earnings, but it evens out over the year, or is refunded.

Part-time work uses the same personal allowance as full-time, which means someone working two days a week may pay little or no income tax at all. And every hourly rate should be checked against the current National Living Wage or National Minimum Wage for the worker's age band, it's a legal floor, not a guideline.

Common questions

How do I convert an hourly rate to an annual salary?: Multiply the rate by weekly hours and by weeks worked per year. At £22 an hour over 37.5 hours and 52 weeks, that's £42,900 gross.
Should I use 52 weeks or fewer?: Use 52 if your holiday is paid, as it is for most employees. Use around 46 to 48 if you're a contractor taking unpaid time off, otherwise the annual figure is optimistic.
Is overtime taxed at a higher rate?: No. Overtime is ordinary earnings and taxed under the same bands. A single large month can appear over-taxed because PAYE spreads estimates across the year, but it corrects itself.
What hourly rate equals a £30,000 salary?: About £15.38 an hour at 37.5 hours over 52 weeks, or £14.42 at a 40-hour week. Enter your own hours above for an exact figure.
Does this include holiday pay?: It assumes your stated weeks are paid. If your rate includes rolled-up holiday pay, reduce the weeks figure so the comparison stays honest.