Convert an hourly rate into annual, monthly and weekly income, using your real working weeks rather than a flat 52. Also shows what the equivalent salary looks like after unpaid time off, which is where most quick conversions go wrong.
The quick conversion everyone uses
The shorthand is to multiply your hourly rate by 2,000 and read the result as your salary. At 35 an hour that gives 70,000. It is close enough for a rough comparison, because 40 hours across 50 weeks is 2,000 hours.
It works for employees. It falls apart for anyone whose income stops when they stop working.
Why contractors need a different number
A salaried employee is paid for 52 weeks, including the ones they spend on vacation or off sick. A contractor is paid only for weeks they actually work and invoice.
Take four weeks of vacation, allow for a week of illness, and add a couple of quiet weeks between contracts, and 52 becomes 45. The same hourly rate now produces meaningfully less over the year, and the gap is entirely invisible in the standard conversion.
That is before employer costs. Equipment, software, pension contributions, insurance and training are all paid by an employer on top of a salary, and by you out of the same hourly rate. Comparing a contract rate to a salary without adjusting for both is how people take a pay cut while thinking they got a raise.
Comparing an offer properly
- Set paid weeks to your realistic working year, not 52.
- Subtract your annual business expenses from the result.
- Add the value of any benefits the salaried role includes: pension, insurance, paid leave.
- Compare that figure to the salary, not the headline conversion.
If you are going the other way and working out what to charge rather than what you earn, the freelance rate calculator starts from your target income instead.
Tax here is a single flat rate for simplicity. Real tax is banded and varies by country and status, so treat the take-home figures as approximate and check your own bands.