Hourly rate calculator 2026/27
Convert between annual salary and hourly rate, and see your effective hourly rate after tax. Useful for comparing job offers, negotiating freelance rates, or checking if overtime is worth it.
Gross hourly rate
£20.11
before tax
Net hourly rate
£16.51
after tax & NI
How to calculate your hourly rate from a salary
To convert an annual salary to an hourly rate: divide the salary by the number of working hours in a year. For a typical 37.5-hour week with 25 days' holiday plus 8 bank holidays:
Working weeks = 52 - (25 + 8) / 5 = 45.4 weeks
Annual hours = 45.4 × 37.5 = 1,702.5 hours
Hourly rate = Salary / 1,702.5
For a £35,000 salary, that gives a gross hourly rate of approximately £20.56. After tax and NI, the effective hourly rate drops to around £15.63.
National Living Wage and minimum wage rates 2026/27
| Age group | Hourly rate |
|---|---|
| 21 and over (National Living Wage) | £12.21 |
| 18 to 20 | £10.00 |
| Under 18 | £7.55 |
| Apprentice rate | £7.55 |
Is overtime worth it after tax?
Overtime pay is taxed at your marginal rate — the rate applied to the last pound you earn. If your regular salary is £48,000 and you do £5,000 of overtime, that extra £5,000 will be split: £2,270 at basic rate (20% + 8% NI) and £2,730 at higher rate (40% + 2% NI).
Despite higher marginal tax, overtime always increases your take-home pay. On a £48,000 salary, an extra hour at 1.5x time (roughly £37/hour gross) yields approximately £23/hour after tax. The key question is whether that net amount is worth your time — not whether it "pushes you into a higher bracket" (only the excess is taxed more).
Freelancer vs employed: comparing rates
When comparing a freelance day rate to an employed salary, remember that freelancers must cover:
- Employer's NI equivalent (not directly payable, but represents lost employer contribution)
- Holiday and sick pay (no paid time off)
- Pension contributions (no employer contribution)
- Professional indemnity insurance
- Accountancy fees
- Unpaid gaps between contracts
A common rule of thumb is that a freelance day rate should be approximately 1.4× to 1.6× the employed equivalent to achieve similar overall compensation. For example, a £50,000 salary roughly equates to a £280–£320/day freelance rate.