Convert an annual salary into an effective hourly rate, accounting for paid leave and holidays.
A salaried employee is paid for weeks they do not work, so their effective hourly rate is higher than salary divided by 52 weeks of contracted hours. That gap is the value of paid leave and is what makes salaried and contract rates comparable. Contractors need a materially higher hourly rate than the naive conversion suggests, because they carry their own leave, sickness and public holidays.
Annual Salary to Hourly
Effective rate = annual salary ÷ hours actually worked, after paid leave and unpaid breaks
Effective rate = annual salary ÷ hours actually worked, after paid leave and unpaid breaks A salaried employee is paid for weeks they do not work, so their effective hourly rate is higher than salary divided by 52 weeks of contracted hours. That gap is the value of paid leave and is what makes salaried and contract rates comparable.
Contractors need a materially higher hourly rate than the naive conversion suggests, because they carry their own leave, sickness and public holidays.
This calculator takes 4 inputs: Annual salary, Contracted hours per week, Paid leave and public holidays, Unpaid break per day. The pre-filled defaults are a realistic starting point — replace them with figures from your own environment for a result you can act on.