Calculator
Hourly Rate Calculator: Salary to Hourly or Freelance Rate
Convert an annual salary to an hourly rate, or work out what to charge as a freelancer from your target income, overheads and billable hours.
Runs 100% in your browser. No signup, no uploads.
Hourly rate
£0.00/hr
You need to bill
£0.00/hr
From salary to hourly rate
The first mode converts an annual salary into an hourly rate. Divide the salary by the hours you actually work: hours per week times weeks per year. A 40,000.00 salary at 40 hours and 52 weeks is about 19.23 per hour.
Adjust the two defaults to your situation. If you take 4 weeks of unpaid holiday, use 48 weeks. If you work 37.5 hours, type 37.5. The rate follows.
This is the gross rate before tax and deductions. Take-home pay depends on your tax code, pension and national insurance, which vary by country and circumstance.
From freelance target to billable rate
The second mode starts with the income you want each month, adds your overheads, and divides by the hours you can realistically bill. Freelancers rarely bill 160 hours a month: admin, proposals and gaps between clients eat a third of it.
Example: you want 3,000.00 a month, your overheads and tax reserve add 1,000.00, and you can bill 100 hours. Your rate is 40.00 per hour. Bill 120 hours and the same numbers give 33.33.
Underpricing is the most common freelance mistake, and it usually comes from underestimating non-billable hours. Use the billable hours field honestly and the rate will be the one that keeps you in business.
Common questions
How do I convert an annual salary to an hourly rate?
Divide the salary by (hours per week x weeks per year). A 45,000.00 salary at 40 hours and 52 weeks is 45,000 / 2,080 = 21.63 per hour.
How many hours does a freelancer actually bill?
Usually 80 to 120 per month, not 160. Administration, sales and unpaid work take the rest. The calculator defaults to 120 and you should adjust it to your own experience.
Should my hourly rate include VAT?
Quote your rate net of VAT, then add VAT on top if you are registered and the supply is taxable. Use the VAT calculator for the final figure on the invoice.
What should my freelance rate cover?
Your target income, plus overheads (software, equipment, insurance), plus a reserve for taxes, holidays and the weeks with no client work. The second mode adds all of that explicitly.
Is the hourly rate the same as my take-home pay?
No. The result is a gross rate. Taxes and deductions reduce it, and for freelancers the tax reserve is your own responsibility.