How this is calculated
Everything routes through an annual figure. From an hourly rate, annual = hourly × hours per week × working weeks per year. From a weekly rate, annual = weekly × working weeks. From a monthly rate, annual = monthly × 12. From an annual figure it passes straight through. Every other output is then derived from that annual number: monthly is annual ÷ 12, weekly is annual ÷ working weeks, daily assumes a five-day week, and hourly is annual ÷ (hours × weeks).
Worked example: $25 an hour at 40 hours a week for 52 weeks is $52,000 a year, $4,333 a month, $1,000 a week and $200 a day. Drop to 48 working weeks — four weeks of unpaid leave — and the annual falls to $48,000 while the hourly rate is unchanged. That $4,000 gap is what an unpaid holiday actually costs.
Monthly is always annual ÷ 12, never weekly × 4. A month averages about 4.33 weeks, so multiplying weekly pay by four understates monthly income by roughly 8% — one of the most common arithmetic errors in personal budgeting.
Why working weeks per year is the field that matters
For a salaried employee with paid holiday, 52 is correct: you are paid across the whole year regardless of when you take leave. For a contractor, a freelancer, or anyone on an hourly rate without paid time off, it is not — every week you do not work is a week you are not paid.
A contractor taking four weeks off and allowing a further two for public holidays and gaps between engagements is working 46 weeks, not 52. That is an 11.5% difference in annual income from the same hourly rate, and it is the single biggest reason contract rates need to exceed salaried equivalents before they are genuinely comparable.
Comparing a contract rate against a salary
Converting an hourly rate to an annual figure is only the first step. A salaried role usually carries paid leave, sick pay, employer pension or retirement contributions, and in some countries employer-paid health cover — none of which a raw hourly rate includes.
A workable rule of thumb is to convert the contract rate using realistic working weeks, then compare against the salary plus its employer-side costs. If the contract figure does not clear the salary by a meaningful margin, the extra flexibility is being paid for out of your own pocket.
How to use the salary calculator (hourly ↔ annual)
- Enter the amount you know. Any pay figure you already have — an hourly rate, a monthly salary, an annual package.
- Select its period. Tell the calculator whether that amount is per hour, week, month or year. Everything else is derived from it.
- Set your real schedule. Hours per week and working weeks per year. Use 52 weeks if you are salaried with paid leave; subtract your unpaid weeks if you are not.