Hourly Rate Calculator

Comparing a salaried offer with an hourly job requires converting one to the other. The bridge is your hours per year — and getting that number right is where most comparisons go wrong.

The formula

Hourly rate = annual salary ÷ (hours per week × weeks per year)

Worked example

An annual salary of ₹12,00,000 at 40 hours/week, 52 weeks/year:

Hours per year = 40 × 52 = 2,080
Hourly rate = 12,00,000 ÷ 2,080 ≈ ₹577/hour

That's roughly ₹4,615/day (8-hour day), ₹23,077/week and ₹1,00,000/month.

Tuning the inputs

• Weeks per year — if you get 2 weeks of unpaid vacation, use 50, not 52. Your effective hourly rate is higher than the "standard" 2,080-hour figure.
• Hours per week — an employee working 45 hours/week on a 40-hour salary earns a lower effective hourly rate.
• Daily rate — the calculator assumes an 8-hour day; shift workers can scale the daily figure up or down.

Setting your own rate as a freelancer

The formula works in reverse for consultants and gig workers, but with two corrections:

1. Billable hours are not working hours. A freelancer might "work" 45 hours a week but bill only 30 — the rest is proposals, admin, calls and unpaid gaps between clients. Use billable hours, not hours-at-the-desk.
2. Overheads and leaves are usually on you. No paid vacation, no PF, no sick days, no laptop. A common method: decide the annual income you want (say ₹15,00,000), add ~30% for overheads and un-billed time (≈ ₹19.5 lakh), divide by realistic billable hours (say 1,400 a year), and you land at roughly ₹1,390/hour — more than double the naive salary-equivalent rate, for good reason.

How to compare offers

1. Convert both offers to hourly rate on the same hours basis.
2. Add the value of paid time off, benefits and bonuses to the total.
3. Remember hourly workers often don't get paid leave — adjust for that.

A salaried ₹12,00,000 job with paid leave usually beats a ₹600/hour contract with unpaid gaps in between. Only when the contract rate clears the "salary-equivalent × 1.3–1.5" band does it genuinely pay more.

Why the number can mislead

• Overtime hours. A role that regularly runs to 50 hours a week is a lower hourly rate than a 40-hour math suggests — always convert with the hours you actually work.
• Gross vs net. The figure here is gross, before income tax. Divide your monthly take-home (see the Take-Home Pay calculator) by your monthly hours for a post-tax hourly view.
• Unpaid breaks. A 9-to-6 with an hour's lunch is billed 8 paid hours for 9 at the office. Decide which one you are measuring and stay consistent across the offers you compare.