What Your Salary Actually Works Out To Per Hour

Salaries are quoted annually because it flatters them. Sixty thousand a year sounds substantial. Twenty-eight pounds an hour sounds like a number you can compare to other numbers — a plumber’s call-out, a freelance rate, the cost of an hour of childcare.

Converting between the two takes one division. Doing it honestly takes slightly more.

The standard conversion

A conventional full-time year is 40 hours a week for 52 weeks: 2,080 hours.

Hourly = Annual salary ÷ 2,080

£60,000 ÷ 2,080 = £28.85 an hour.

That’s the figure recruiters and salary surveys use, and it’s the right one for comparing two offers on equal terms.

The mental shortcut

Halve the thousands. A £50,000 salary is roughly £25 an hour. £70,000 is roughly £35. £44,000 is roughly £22.

It works because 2,080 is close to 2,000, and dividing by 2,000 is the same as halving and dropping three zeros. The error is about 4% — fine for deciding whether a quoted rate is in the right range.

Going the other way: double it and add three zeros. £30 an hour is about £60,000 a year.

Now the honest version

The 2,080 figure assumes you work your contracted hours. Plenty of people don’t, and the gap is where the interesting number lives.

Weekly hours	Annual hours	£60k works out at
35	1,820	£32.97
40	2,080	£28.85
45	2,340	£25.64
50	2,600	£23.08
55	2,860	£20.98
60	3,120	£19.23

Working 50 hours instead of 40 on a £60,000 salary is a 20% pay cut that appears on no payslip and gets discussed in no review.

This reframes a lot of decisions. “The new role pays £8,000 more” is a different proposition if it also comes with ten more hours a week — that’s £28.85 down to £26.35, and you’ve bought yourself a pay cut with extra steps.

Run both numbers before accepting anything. The contracted figure tells you what the market thinks the job is worth. The actual figure tells you what you’re being paid.

Contract rates are not comparable

A £400 day rate looks like £104,000 a year against 260 working days. It isn’t, because a contractor pays for everything an employer would otherwise cover.

Paid holiday. Five weeks plus public holidays is roughly 30 days — about 11.5% of the working year. A contractor taking that time takes it unpaid.

Sick pay. Usually none. A fortnight of flu is a fortnight of no income.

Pension. The employer contribution disappears. In the UK that’s a minimum of 3%; many employers offer 5–10%.

Utilisation. Almost nobody bills 260 days. Between contracts, business development, admin and invoicing, 220 billable days is a realistic good year — and that’s 15% off the top.

Everything else. Equipment, insurance, accounting, training, and no notice period or redundancy protection.

Stack those up and a contract rate needs to be roughly 25–30% above the salaried equivalent before the two packages are genuinely comparable. In markets with expensive private healthcare, more.

Working backwards: to match a £60,000 salary, a contractor needs about £75,000–78,000 gross, which across 220 billable days is roughly £350 a day.

Reading a raise properly

Three things determine what a raise is actually worth, and only one of them is the percentage.

Inflation. A 3% raise in a year of 5% inflation is a 2% pay cut. If your salary buys less than it did last year, you were not given a raise. This is the number to check first and the one most likely to be quietly omitted from the conversation.

Compounding. Raises stack on the previous base, so small differences diverge fast:

Year	3% a year	5% a year
0	£50,000	£50,000
5	£57,964	£63,814
10	£67,196	£81,445
15	£77,898	£103,946

Two percentage points a year is a £26,000 annual gap after fifteen years — and a much larger gap in total earnings across the period. It’s also why the starting salary you negotiate matters more than any single raise afterwards: every future percentage applies to that base.

Total package. A 2% raise plus an increase in employer pension contribution from 4% to 8% is worth far more than a 5% raise alone. Bonus structure, holiday allowance, healthcare and equipment budgets are all real compensation. Compare packages, not headline salaries.

Things worth pricing per hour

Once you know your hourly figure, some decisions get easier:

• A two-hour commute each way. Twenty unpaid hours a week. Against a £28.85 hourly rate, that’s £577 a week of your time — which is the real comparison for a job closer to home paying less.
• Overtime that isn’t paid. Now quantified.
• A task you could pay someone else to do. If your hour is worth £29 and someone will do it properly for £15, the arithmetic is straightforward — though only if you’d genuinely use the reclaimed hour for something worth £29.
• The commute itself. Fuel, fares and parking are the obvious cost. The hours are the larger one.

The caveat on all of it

Every figure here is gross — before income tax, national insurance or social security, pension contributions and student loan repayments. Take-home is lower, and by how much depends on your country, region, allowances and circumstances.

Marginal rates also mean a raise is worth less than it looks: crossing into a higher band means a portion of the increase goes to tax. That doesn’t make raises bad — you always keep some of it — but it does mean a 10% gross raise is never a 10% increase in what lands in your account.

For take-home, use your national tax authority’s calculator. For everything else on this page, gross is the right basis, because it’s what the market actually quotes.