Hourly Rate Calculator

An hourly rate is the salary spread over the working year. With h hours a week and w weeks a year, hourly = salary ÷ (h × w). A 40-hour, 52-week year divides by 2,080, so $52,000 a year is $25 an hour. The other direction multiplies: annual = rate × h × w, and the monthly figure is the annual figure ÷ 12.

The common mistake is dividing by 2,080 when the year is shorter. Unpaid leave, a four-day week, or a late start all shrink the divisor, and every hour removed raises the true hourly figure. Type the hours and weeks you actually work and the conversion stays honest.

An employee paid $25 an hour who goes freelance at $25 an hour has taken a pay cut of roughly half. The employee is paid for 2,080 hours; the freelancer bills a fraction of the hours they work — the rest is quoting, admin, chasing payment and gaps between clients — pays their own business costs, and gets no paid leave. The rate has to cover the take-home goal plus the costs plus a margin, spread over billable hours only:

Required rate = (goal + costs) × (1 + margin) ÷ (billable hours a week × billed weeks). Twenty billable hours across 48 weeks is 960 hours, not 2,080 — the same $80,000 goal needs more than twice the employee hourly figure before costs and margin are even added.

This works with the figures you give it, before tax. It does not account for income tax, payroll tax, benefits you give up or gain, overtime rules, or what clients in your market will pay, and it is not tax or business advice. The goal you type should be the pay you want to keep, and anything you owe on it still has to come out of these figures.