Ever wonder how to calculate your hourly rate to salary?
by Heat Recruitment
A simple equation to help you work out your hourly rate
There are plenty of reasons why you may want to convert your annual salary to your hourly rate, or vice versa. You may be job hunting, negotiating your salary or requesting a pay rise. Alternatively, you might have been asked to calculate your weekly earnings in order to claim employment benefits – for example, redundancy pay. No matter the reason, there’s a simple equation which can do all the hard work for you.
Converting annual salary to hourly rate
If you have a typical workweek of around eight hours per day, this straightforward method is perfect for you. However, bear in mind that this isn’t the most accurate method if you tend to work a lot of overtime.
We’ll use the following formula:
(annual salary ÷ number of weeks in a year) ÷ hours worked per week = hourly rate
So, let’s put in some figures and calculate an example. To keep things simple, we’ll say you work 35 hours per week and earn £20,000 per annum. Of course, there are 52 weeks in each year – so we’ll start by dividing your annual salary by 52.
(£20,000 ÷ 52) ÷ 35 = hourly rate
£384.62 ÷ 35 = hourly rate
£10.99 = hourly rate
Converting hourly rate to annual salary
Now let’s reverse the process. If your salary is calculated using an hourly rate, it’s likely your hours tend to vary. For the most accurate results, you’ll need to work out how many hours you tend to work on an average week – not including any lunch breaks. Then it’s time to use the equation:
(number of hours per week x hourly rate) x number of weeks in a year = annual salary
Again, there’s 52 weeks in each year and for this example let’s say you work 35 hours per week and earn £10.99 per hour. Here’s how it looks once we put these numbers into the equation:
(35 hours x £10.99) x 52 weeks = annual salary
£384.65 x 52 weeks = annual salary
£20,000 = annual salary
If you earn commission or work overtime, your salary will vary – so remember to take this into consideration when using the calculation above. There are a number of online calculators that can help you to work out your salary when it’s influenced by lots of different factors.
One challenging factor can be earning an overtime rate that’s higher than your basic hourly rate. Many companies have an overtime rate of one and a half times your basic rate – this is commonly known as ‘time and a half’.
However, this varies between companies and it’s worth noting that employers have no legal obligation to pay their employees for overtime. If you’re unsure, refer to your contract of employment – and if you are paid for it, it should also provide details of how the rates are calculated.
If you’re looking for more expert advice and guidance on the job application process, we’ve got plenty of career-focused tools to make your experience as smooth as possible.