Hourly to Salary Calculator
Use this calculator to easily convert your hourly rate to a yearly salary, monthly salary or weekly salary. Estimate how much you would make a year at a given hourly wage.
- Hourly to Salary calculation
- Holidays and vacation days assumptions
- Choosing a good hourly rate / salary
Hourly to Salary calculation
In order to convert an hourly rate to salary, you need to first enter your hourly pay and an average number of hours per week that you bill. Then you need to enter things that will allow us to estimate an equivalent weekly, monthly, and yearly salary: the number of working days per week, the number of days that we should subtract due to official holidays, as well as the number of days you take off work to go on vacation. See more on this below.
Then our hourly to salary calculator multiplies your hourly rate by the average number of hours your work per year, then subtracts the hourly rate multiplied by the number of hours you do not work due to holidays and vacations. This gives a very accurate estimate of what yearly salary corresponds to a given hourly pay. From that our calculator calculates and displays the equivalent daily, monthly, and weekly salary.
Holidays and vacation days assumptions
It is assumed that all holidays you specify do not coincide with weekends. If you can, check that it is the case by using a calendar and a list of official holidays.
Similarly, for vacation days, you must enter only the days you take off work, not the whole duration of your vacation, including weekends and official holidays. Say you take a 2-week vacation, during which there is an official holiday on the first Monday, and that you are on a regular 5-day work week. This means that in our hourly to salary calculator above you need to enter 5 x 2 - 1 = 9 vacation days, not 10, and certainly not 14 (7 x 2).
Choosing a good hourly rate / salary
As with the price of any good exchanged on a free market, hourly wages are determined primarily by the law of supply and demand - you will be able to negotiate work only where the two meet, and nowhere else. This meeting point is specific to your business niche, your expertise (a.k.a. "human capital"), and sometimes to your location and language skills.
A degree does not guarantee a given income level
Some people wrongly assume that a given degree warrants them a given rate, or that the fact that their current lifestyle requires them to earn a given hourly pay to be maintained, means that someone has to pay them that rate. In fact, your hourly rate or salary is related to your living expenses only inasmuch as you will most likely be unwilling to work for an hourly rate that will not allow you to support yourself. Naturally, you will also be more inclined to sign a contract for a rate that allows you to also set money aside, so you can start your own business, or buy a nicer house or car, or send your kids to a better college. When considering your salary based on a given hourly rate you should take into account both your regular expenses, as well as expenses that might increase or decrease depending on the volume of work you are doing. This, of course, assumes you are covering some of those expenses.
Take all expenses into account
If you end up comparing your hourly rate as a consultant or outside contractor to wages given to employees, make sure to account for the expenses you incur which an employer is usually covering for their employees, such as office space, electronics, software subscriptions, accounting expenses, professional education, certification, office perks, and so on. The wage paid for the same work would likely be adjusted down to account for such expenses being covered by the employer instead of your own pocket. Consequently, the hourly rate needs to be adjusted up if switching from a job to freelancing to account for the fact that these expenses are going to be covered by you going forward.
Before versus after tax income
When using this hourly to salary calculator to learn how much your hourly rate is as an yearly salary, you should always consider the difference between pre-tax and after-tax salary, and hence - hourly. Make sure you account for all applicable local and state taxes imposed on labor. Yes, however illogical it seems due to the economics 101 knowledge that everything you tax tends to diminish, while everything you subsidize tends to grow, labor is taxed in many jurisdictions around the world, suggesting that there is a desire to make people produce less. Just remember that in the end you will not be able to spend the sum written on your salary check or hourly-rate invoice, and that in many jurisdictions employment on a job contract may be taxed differently than employment as an outside contractor or self-employment.
Cite this calculator & page
If you'd like to cite this online calculator resource and information as provided on the page, you can use the following citation:
Georgiev G.Z., "Hourly to Salary Calculator", [online] Available at: https://www.gigacalculator.com/calculators/hourly-to-salary-calculator.php URL [Accessed Date: 22 Oct, 2021].