How to work out a salary from an hourly rate
The basic formula is simple:
Annual salary = hourly rate × hours per week × weeks per year
The calculator does this for you and runs the result through the same Income Tax and National Insurance engine as our take-home pay calculator. That way you see the salary and what it’s actually worth after tax. Switch to Salary → hourly to go the other way, for example to compare a salaried job offer with contract or shift work.
Worked example: £15 an hour
At £15.00 an hour for 37.5 hours a week, paid for all 52 weeks, your gross pay is £29,250 a year. After Income Tax (£3,336) and National Insurance (£1,334) you take home £24,580 a year, or about £2,048 a month.
Add five hours of overtime a week at time-and-a-half (£22.50 an hour) and the gross rises by £5,850 a year. Take-home goes up by £4,212, because overtime is taxed at your marginal rate.
| £15/hour, 37.5 hrs | Without overtime | With 5 hrs at 1.5× |
|---|---|---|
| Gross per year | £29,250 | £35,100 |
| Take-home per year | £24,580 | £28,792 |
| Take-home per month | £2,048 | £2,399 |
Minimum wage check
From 1 April 2026 the National Living Wage is £12.71 an hour for workers aged 21 and over. That’s £24,785 a year for a 37.5-hour week. The calculator compares your base rate with the minimum for your age band and warns you if it’s below it.
| Age band (from April 2026) | Hourly minimum |
|---|---|
| 21 and over (National Living Wage) | £12.71 |
| 18 to 20 | £10.85 |
| Under 18 | £8.00 |
| Apprentice (under 19 or first year) | £8.00 |
Some deductions and unpaid working time can take your effective pay below the minimum even when the headline rate looks fine. Examples include uniform you have to buy or compulsory training outside paid hours. ACAS can help if you’re unsure.
Overtime bands
Many contracts pay a premium for extra hours: commonly time-and-a-half (1.5×) on weekdays and double time (2×) on Sundays or bank holidays. Add up to two overtime bands with their own multipliers. Use Enter hours day by day if your rota varies across the week. The calculator then adds your basic hours from each day.
There’s no legal right to an overtime premium. Unless your contract says otherwise, overtime can be paid at your normal rate, as long as your average pay for all hours worked stays above the minimum wage.
Paid and unpaid holiday
Full-time employees are entitled to 5.6 weeks of paid holiday a year (28 days for a five-day week, which can include bank holidays). If you’re paid for holidays, use 52 weeks. If you’re paid only for the hours you work and get no holiday pay, as with some agency and zero-hours roles, switch on Holidays are unpaid. The calculator then uses 46.4 paid weeks.
Comparing hourly work with a salaried job
When you compare a contract or shift role with a salaried one, look beyond the annual equivalent:
- Paid holiday and sick pay. A salaried role usually includes both. An hourly rate with no holiday pay needs to be about 12% higher to match.
- Pension. Employer contributions of 3–10% of salary are part of the package.
- Guaranteed hours. A salary is fixed. Hourly work can vary week to week.
Our pay rise and job offer calculator compares two packages including pension, commute and hours, so you can see the real value per hour worked.
Frequently asked questions
How do I convert an hourly rate to an annual salary?
Multiply the hourly rate by your weekly hours, then by 52. For example, £15 an hour × 37.5 hours × 52 weeks = £29,250 a year. If your holiday is unpaid, use roughly 46.4 weeks instead of 52.
What is the National Living Wage from April 2026?
£12.71 an hour for workers aged 21 and over. The rate is £10.85 for 18 to 20 year olds and £8.00 for under-18s and first-year apprentices.
Should I use 52 or 52.14 weeks?
Most employers use 52 weeks. A year actually has 52.14 weeks (365 ÷ 7), and some payroll systems and contracts use that figure, which adds about 0.3% to the annual equivalent.
How is overtime taxed?
Overtime is taxed exactly like normal pay. It only feels heavier because it is added on top of your salary, so it's taxed at your marginal rate — usually 28% for basic-rate taxpayers once NI is included.
Is holiday pay included in my hourly rate?
For most employees it isn't. You get 5.6 weeks' paid holiday on top of your rate. Some irregular-hours and part-year workers have holiday pay 'rolled up' into the rate at 12.07%. If that's you, switch on 'Holidays are unpaid'.
How many working hours are in a year?
1,950 hours for a 37.5-hour week over 52 weeks, or 2,080 for a 40-hour week.
Sources
Results are estimates for education and planning, not financial advice. They depend on the figures you enter and the assumptions shown above.