Free hourly to salary equivalent calculator
“But that’s like a $197,600 job.” Every freelancer who quotes $95 an hour eventually hears some version of it: the client multiplies the rate by 40 hours and 52 weeks and concludes you out-earn their senior staff. The napkin maths lies in your favour — and it still isn’t true. It bills every hour you work as an hour a client pays for, gives you no week off, ever, and takes nothing out before the money is yours. Price in the reality instead — 24 billable hours in a 40-hour week, 48 working weeks, $4,800 a year of business expenses and 25% set aside for tax — and $95 an hour keeps $78,480: the equivalent of a $78,480 salary, before benefits are even compared. This page is the mirror image of our salary to freelance rate calculator: that one asks what rate a salary demands; this one answers what salary your rate actually is.
Your rate, converted honestly
Starting from a salary instead — leaving a job, or weighing an offer against the rate you already charge? That is the salary to freelance rate calculator: the same honesty, run in the other direction.
The salary it actually equals
Enter your rate, your real billable week and the weeks you work.
| Billable hours in the year | — |
| Gross annual billings | — |
| Minus your business expenses | — |
| Pre-tax income | — |
| Minus your tax set-aside (25%) | — |
| Take-home — your salary equivalent | — |
| The napkin number (rate × 40 × 52) | — |
| The gap — what the napkin overstates | — |
Enter your rate and your real week, and this line reads the shape of the answer back to you.
Worked example
A consultant charges $95 an hour. In an ordinary week 24 of their hours are billable; they work 48 weeks of the year; the business costs $4,800 a year to run; and they set 25% of what is left aside for tax. Enter those numbers above and the calculator returns exactly this:
| Hourly rate | $95 |
| Billable hours (24 a week × 48 weeks) | 1,152 hours |
| Gross annual billings | $109,440.00 |
| Minus business expenses | $4,800.00 |
| Pre-tax income | $104,640.00 |
| Minus tax set-aside (25%) | $26,160.00 |
| Take-home — the salary equivalent | $78,480.00 |
| Take-home a month | $6,540.00 |
| The napkin number ($95 × 40 × 52) | $197,600.00 |
| The gap | $119,120.00 (151.8%) |
Read the gap the way the client will not. The napkin number is not a lie about your rate; it is a lie about your hours and your costs — it bills the admin, the pitching and the holiday, and spends none of the money on the business or the tax. A stronger week narrows it less than you would hope: $60 an hour at 30 billable hours a week for 50 weeks bills $90,000 and keeps $69,600 after $3,000 of expenses and a 20% set-aside, against a napkin number of $124,800. The equivalent is the figure to negotiate from. The napkin is the figure to retire.
How the equivalent works
- Billable reality comes first. Your rate only earns in the hours a client pays for. Admin, marketing, proposals, invoicing and chasing payment fill the rest of a 40-hour week and bill nothing — which is why the default here is 24 billable hours, not 40. The hourly rate calculator works from this same share in the other direction, spreading a target income across the hours that can actually be sold to find the rate; if your billable share is a guess, the utilization calculator measures it from one tracked week — use its number here before trusting either page.
- The weeks are the ones you work. A salary pays for 52 weeks, holidays included. A rate is earned only in working weeks — the default 48 takes four weeks off, and our guide to taking time off as a freelancer is about making those weeks real rather than theoretical. Every week off lowers the equivalent; that is not an argument against the holiday, it is the price of it, shown.
- The expenses are yours now. Software, insurance, equipment, the accountant — as an employee these were somebody else’s budget lines. As a freelancer they come straight out of the billings before anything is yours, so they come off here before the equivalent is named. If the figure is a guess, the freelance expenses checklist turns it into one honest annual number.
- The set-aside is yours too. Employment took tax before you saw your pay. Freelancing hands you the gross and trusts you to move the tax share aside yourself — the percentage here is your own planning figure, the same one the tax set-aside calculator turns into a per-payment habit. It is not a prediction of what you will owe; it is the discipline of not spending money that was never yours.
- And the comparison is money-only. A salary carries an employer’s contributions, insurance, pension and paid leave on top of the number — value this page does not price. So even the honest equivalent understates what a matching salaried package is worth: matching the package takes more than matching the number. The salary to freelance rate calculator starts from a salary and adds every one of those layers back to find the rate that replaces the whole package; run both pages and the two directions agree, which is what makes either of them safe to quote.
- Use it when an offer lands. If an employer offers you a salary to come in-house, run your current rate through this page before you answer. The offer has to beat the equivalent above — and then still replace the benefits value that the equivalent leaves out — before it is actually a rise. The solo quarterly business review is the standing appointment where this comparison gets re-run, so the number is fresh on the day the offer arrives.