Correct way to calculate your hourly rate?

[MitchT]

What's the correct way to calculate your hourly rate when you're employed in the conventional way? Is it ...

A: Annual salary divided by 52 divided by hours worked per week, or ...

B: Annual salary divided by actual number of weeks worked in a year (52 weeks less annual leave and bank holidays) divided by hours worked per week?

C: Something else?

[Drumroll]

Generally A, as you get paid for your holidays (generally)

[Pinkie15]

I'd say it depends what the purpose of the calculation is.

If this is to get an idea of what you'd need to earn as a contractor cf employee then you need to factor other things in to "salary".

If it's just to compare a job quoted as annual salary with one quoted per hour then use A

[MitchT]

Pinkie15 said:

I'd say it depends what the purpose of the calculation is.

If this is to get an idea of what you'd need to earn as a contractor cf employee then you need to factor other things in to "salary".

If it's just to compare a job quoted as annual salary with one quoted per hour then use A

Just interested in deriving the hourly rate from an annual salary for a PAYE role. I know what I can earn as a contractor with, as you say, other things factored in, so that's not an issue.

[S6PNJ]

C - something else? AFAIUI there are 253 working days in 2018, then depending on how many hours you are contracted for in a week (35, 37.5, 40, other) divided by 5 will give your hours per day.

Salary / (hours per day *253) = equivalent hourly rate

[ANJ91]

A

[anonymous-user]

If you are comparing to invoicing as a ltd company then you should add the total package. As an example

£100k/year = c£380-390/day? or c£50/hr for 7.5-8hr day ?

Once you add in bonuses, car allowance, pensions, holidays, sick days, other benefits, then it's more like £700/day


Assuming you work 260 days a year for 8hrs a day then the basic salary divided by 2,000 is the hourly rate, ignoring any other benefits.

In a real snr interim role then the daily rate is more like 1% of the old basic salary

[llewop]

I recall that the civil service way of calculating it was gross hours: 37 hour week with 1 hour lunch = 42 hours/week - which at the time felt a mean way of working out your overtime rate!

[llewop]

I recall that the civil service way of calculating it was gross hours: 37 hour week with 1 hour lunch = 42 hours/week - which at the time felt a mean way of working out your overtime rate!

[RTB]

My contract states 36.5 hours per week. I get paid public holidays, so it's essentially 36.5 hours x 52 = 1898 hours per year

Gross Salary/1898 = hourly rate