Updated on 30 September 2026 by the Proposal Expert editorial team
Turn a salary into an hourly wage, or set the hourly and day rate you charge as a freelancer
An hourly rate is your yearly salary divided by 52 weeks times your weekly hours or, if you freelance, your income target plus costs divided by your billable hours. This hourly rate calculator does both. In salary mode, enter your gross yearly salary and the hours you work a week, and you see your hourly wage plus what you earn a week and a month. In freelance mode, enter the income you want before tax, your yearly business costs, the weeks you work, your hours a week and the share of those hours a client pays for. You get your billable hours a year, the hourly rate to charge and the matching day rate.
Salary: hourly wage = yearly salary ÷ (52 × hours a week). Freelance: hourly rate = (income + costs) ÷ (weeks × hours a week × billable % ÷ 100). Day rate = hourly rate × 8.
An employee is paid for all 52 weeks of the year, paid holiday included, so the salary formula divides by 52 × your weekly hours. A freelancer only earns in the hours a client pays for, so the freelance formula divides by billable hours. That is why a freelance rate is always well above the hourly wage for the same yearly income. The reverse works the same way: hourly wage × hours a week × 52 gives the yearly salary, and hourly rate × billable hours gives the yearly revenue your rate brings in.
A freelance web designer wants to earn $60,000 a year before tax and expects $12,000 a year of business costs for software, equipment, insurance and an accountant. She plans 44 working weeks, which leaves eight weeks for vacation, public holidays, sick days and training, and she works 40 hours a week. Only 70% of those hours go to client work. The rest goes to sales, admin and writing quotes. Add the income and the costs, divide by her billable hours, and the table shows her billable hours a year, the hourly rate she needs and the day rate for an eight-hour day.
| Billable hours a year | 1,232 |
|---|---|
| Day rate (8 hours) | $467.52 |
| Hourly rate | $58.44 |
Divide your gross yearly salary by 52 and then by the hours you work a week. For a standard 40-hour week that means dividing by 2,080, the same full-time, year-round schedule the Bureau of Labor Statistics uses to turn hourly wages into annual wages. The federal government uses a slightly different divisor. OPM computes the hourly rate of federal employees by dividing the annual rate of basic pay by 2,087 hours, because a calendar year has 260, 261 or 262 workdays rather than exactly 52 weeks. In the UK, enter your contracted hours. At 37.5 hours a week a year has 1,950 hours, so a salary of £30,000 works out at £15.38 an hour. The calculator also shows your weekly pay (salary ÷ 52) and your monthly pay (salary ÷ 12), all before tax. At 40 hours a week these salaries convert as follows:
Because an employer pays for much more than the hours you work. In the UK almost all workers are legally entitled to 5.6 weeks' paid holiday a year, which is 28 days for someone who works a five-day week. Employers there also pay into a workplace pension, at least 3% towards a minimum total of 8%. In the US the Fair Labor Standards Act does not require payment for time not worked, such as vacations, sick leave or holidays, and leaves those benefits to agreement between employer and employee. US employers do pay half of Social Security and Medicare, 6.2% and 1.45% on top of the wage. As a freelancer you pay all of this yourself, and you only earn in the hours a client can be billed. Put the hourly rate from the example table next to $28.85, the hourly wage of a $60,000 salary, and the gap is the cost of being your own employer.
Fewer than most people expect. Start with 52 weeks and take off the weeks you will not work: vacation, public holidays, sick days and training. Eight weeks off leaves 44 working weeks, the figure in the example. Then estimate what share of your working time a client actually pays for. Every freelancer spends hours on work nobody is billed for, and the billable hours have to pay for those too. If you are just starting out and still building a client base, begin with a cautious percentage and raise it only when your time records prove it. Typical non-billable work includes:
Split your figures over the two fields of the calculator. Under costs, put everything the business pays for in a year: software, equipment, a workspace, business insurance, an accountant, travel, marketing and your phone. Under income, put what you want to earn before tax, and make it big enough for the things an employer used to pay for. In the US, self-employment tax is 15.3%, made up of 12.4% for Social Security and 2.9% for Medicare, and the IRS lets you deduct the employer-equivalent portion when you calculate your adjusted gross income. In the UK, self-employed people pay Class 4 National Insurance of 6% on profits over £12,570 up to £50,270 and 2% on profits over £50,270 in the 2026 to 2027 tax year, which most people pay through Self Assessment. Health cover, retirement savings and a cash buffer for quiet months belong in your income target too.
Multiply your hourly rate by the hours in your working day. The calculator uses an 8-hour day. If your contract assumes 7.5 hours, multiply by 7.5 instead, and agree in writing how many hours a day covers, so that long days do not turn into unpaid overtime. To check a day rate you have been offered, turn it around. Divide it by 8 for the hourly rate, then multiply by your billable hours to see the yearly revenue it would bring in. In the UK, contractors who work through their own limited company should also check the off-payroll working rules, known as IR35. These rules make sure a worker pays broadly the same Income Tax and National Insurance as an employee would, and a medium or large client decides the employment status itself. The outcome changes what you keep from the same day rate, so settle it before you agree the rate.
It depends on who carries the risk. With an hourly or day rate the client pays for the time the work really takes, which suits work whose scope is still unclear. With a fixed price you carry the risk of overruns, so estimate the hours, multiply by your rate and add a margin for surprises. Whatever you choose, make clear whether your prices include tax. In the UK you must register for VAT once your taxable turnover for the last 12 months goes over £90,000, or when you expect it to go over £90,000 in the next 30 days. From then on you add VAT on top of your rate, at the standard rate of 20% for most goods and services. Business clients usually compare prices before VAT, while consumers expect a total that includes it. In the US, state whether sales tax applies and at which rate.
The final step is to put this price into a quote. List the work as lines of hours × rate, or as one fixed price, and say what is included and what counts as extra work. State whether the prices include VAT or sales tax. Proposal Expert's price table calculates VAT and totals, including VAT per line, and the free plan allows 3 quotes and 3 digital signatures a month.
At least enough to cover your income target, your business costs and your time off at the hours you can actually bill. Enter those figures in freelance mode to find that floor, then compare it with what others in your field charge. If the market pays less than your floor, work on your costs, your billable share or your niche before you lower the rate.
52 weeks of 40 hours is 2,080 hours, the full-time, year-round figure the Bureau of Labor Statistics uses. The US federal government uses 2,087 hours for its pay. At 37.5 hours a week a year has 1,950 hours. A freelancer bills far fewer, because holidays, sick days and admin come off.
Multiply the hourly rate by your hours a week and then by 52. $25 an hour at 40 hours a week is $25 × 40 × 52 = $52,000 a year before tax.
The federal minimum wage in the US is $7.25 per hour, effective since July 24, 2009. Some state laws give employees greater protection, and employers must comply with both. In the UK the National Living Wage for workers aged 21 and over is £12.71 an hour from April 2026, and the rates change on 1 April every year.
No. Every figure is before tax. The salary is gross, the freelance income is what you want to earn before income tax, and the hourly and day rates exclude VAT and sales tax. If you charge those, add them on top in your quote.