From yearly salary to hourly rate — and what you really take home
By Johannes Nieuwboer · 6 min read
A yearly salary and an hourly rate describe the same thing in different units, but converting between them is full of small traps: paid holidays, unpaid overtime, taxes and benefits. This guide walks through the conversion step by step.
The basic conversion
A full-time year is commonly counted as 52 weeks × 40 hours = 2,080 hours. Divide the yearly salary by 2,080 to get the gross hourly rate. A $52,000 salary is $25 an hour; $75,000 is about $36.06.
In countries with a 36- or 38-hour working week, use that figure instead: 52 × 36 = 1,872 hours. The same €52,000 then works out to about €27.78 per hour.
Hours you are paid but don't work
Salaried employees are usually paid for public holidays and vacation. If you get 25 days off, you actually work about 2,080 − 200 = 1,880 hours a year. Your effective rate per hour worked is then higher: $52,000 / 1,880 ≈ $27.66.
The opposite happens with regular unpaid overtime. Working 45 hours a week on a 40-hour salary lowers your real hourly rate by about 11%.
Gross vs. net
Gross pay is the amount before income tax, social-security contributions and pension deductions. Net pay is what reaches your bank account. The gap depends heavily on country, income level and personal situation, ranging from under 20% to over 40% of gross pay.
Because tax systems differ so much, QuickCalc's salary tools work with gross figures. For an exact net amount, use your government's official tax calculator or your payslip.
Comparing employment with freelancing
A freelance hourly rate is not comparable one-to-one with an employee's hourly wage. Freelancers pay for their own holidays, sick days, pension, insurance, equipment and unbilled time spent on admin and finding clients.
A common rule of thumb is that a freelancer needs to bill 1.5 to 2 times the equivalent employee hourly rate to end up with a similar standard of living. If only 60% of working hours are billable, the required rate rises further.
A worked example
Offer A: $60,000 salary, 40 hours, 20 days paid leave. Hours worked ≈ 2,080 − 160 = 1,920, so about $31.25 per hour worked.
Offer B: $30 per hour freelance, expecting 1,400 billable hours. Gross income $42,000, before paying for any leave, insurance or pension. Despite the similar headline numbers, offer A is clearly the stronger one in this scenario.