Hourly to Salary Calculator — Annual, Monthly & Loaded Cost

How it works

The conversion is mechanical: annual salary equals hourly rate multiplied by hours per week multiplied by weeks per year. A 40-hour week × 52 weeks gives 2,080 hours — the standard full-time year used across most US, UK, and South African payroll calculations. Reduce to 48 weeks if the role includes four weeks of unpaid leave, or to 1,920 hours if it includes statutory paid leave that doesn't bill to clients (the most common freelancer adjustment).

The loaded-cost figure is what most employers and contractors miss. On top of the headline salary, an employer pays statutory taxes (FICA in the US, employer NIC in the UK, UIF and SDL in SA), plus benefits — health insurance, pension contributions, paid leave accrual, equipment, and software. The default loaded-cost percentage per region is a market median; adjust it for your actual benefits package.

Common mistakes

• Quoting a freelance rate based only on the salary equivalent— a contractor charging the headline hourly rate of a salaried role earns far less, because they cover their own taxes, paid leave, pension, equipment, and downtime between contracts. Most freelancers need at least a 50-80% premium on the equivalent salaried hourly rate to match an employee's after-tax outcome.
• Forgetting that 52 weeks ignores unpaid leave — if a role pays 25 days of paid leave plus 8 public holidays, the worker only delivers about 47 weeks of productive time. For freelance pricing, divide annual target earnings by 47 × 40 = 1,880 hours, not 2,080.
• Ignoring the loaded cost when comparing employee vs contractor pricing — a $50/hr employee costs the business closer to $64/hr after taxes and benefits. Comparing this to a $60/hr contractor invoice with no employer obligations is closer to apples-to-apples than the headline-rate comparison most managers make.

When to use this calculator

Use this when you need to compare hourly and salaried offers, set a freelance rate against a target annual income, or work out the true cost of hiring an employee at a given salary. The loaded-cost figure is the right number to compare against a contractor's invoice rate when deciding between contract and permanent staffing.

For a more detailed look at the full cost of an employee (including office space, software licenses, and onboarding), use the Employee Cost Calculator. For sustainable freelance pricing that accounts for downtime, holiday, and admin time, use the Freelance Rate Calculator.

Worked example

A UK marketing manager earns £45,000 a year on a standard 37.5-hour week with 28 days paid leave plus 8 public holidays. The headline hourly rate is £45,000 ÷ (37.5 × 52) = £23.08/hr. But the actual billable hours are closer to 37.5 × 45 = 1,687.5, so the real productive hourly cost is £45,000 ÷ 1,687.5 = £26.67/hr.

The employer's loaded cost is significantly higher. Employer NIC at 13.8% on earnings above £9,100 adds about £4,950. Pension matching at 3% adds £1,350. Office, equipment, and software typically add £4,000-£6,000 per head per year. The true loaded cost is closer to £56,000-£58,000 — about 24-29% above the headline salary, depending on benefits richness.

A freelance equivalent quoting £30/hr would invoice 1,687.5 × £30 = £50,625 for the same productive time. From the employer's perspective the contractor is cheaper than the loaded employee cost. From the worker's perspective the freelancer earns less than the headline salary after self-employment taxes, lost paid leave, and their own pension provision — which is why sustainable freelance rates are usually 50-80% above the equivalent salaried hourly rate.

Frequently Asked Questions

Glossary

Loaded Cost

Total employer cost per employee — gross salary plus statutory taxes (FICA, NIC, UIF) plus benefits and overhead.

Billable Hours

The portion of working hours that produce revenue — excludes paid leave, training, admin, and downtime.

Annualisation

The conversion of a periodic figure (hourly, weekly, monthly) into a yearly equivalent for comparison.

Related calculators

Try these scenarios

Pre-filled examples — click any chip to load the inputs and result.

• Standard: $25/hr full-time
• Reverse: $80k annual to hourly
• UK 37.5-hour week

How to convert hourly rate to annual salary

1. 1
   Pick a directionChoose Hourly → Annual or Annual → Hourly using the mode toggle.
2. 2
   Enter the rate or salaryType the hourly rate or annual salary you want to convert.
3. 3
   Set hours per week and weeks per yearDefault is 40 × 52 = 2,080 hours/year. Reduce weeks if the role includes unpaid leave.
4. 4
   Review the loaded-cost figuresThe calculator shows the true employer cost after statutory taxes and benefits.