Hourly vs Salaried: Which Offer Is Better for You?

When you’re job hunting in the UK, you’ll often see two types of pay: an hourly rate (e.g. £15 per hour) or an annual salary (e.g. £30,000). Comparing them directly isn’t always straightforward because hours, overtime, and benefits differ. That’s where a post tax salary calculator comes in – it helps you convert any hourly rate into a yearly figure and shows what you’ll actually take home after deductions.

This article explains how to compare hourly jobs with salaried offers using the latest UK benchmarks, so you can make an informed decision.

The Basics: Converting Hourly to Annual

The standard conversion used by employers and HMRC is:

Annual gross salary = hourly rate × contracted hours per week × 52 weeks

For example, if you’re offered £15 per hour for a 37.5-hour week:

£15 × 37.5 × 52 = £29,250 per year

If the job is advertised at 40 hours per week, the same hourly rate gives £31,200 per year. Always check the contracted hours – they make a big difference.

To see your net (take-home) pay, use a post tax salary calculator that applies the current Income Tax bands and National Insurance thresholds. For 2026/27, the Personal Allowance is £12,570, and the basic rate of tax is 20% on earnings up to £50,270.

UK Earnings Benchmarks: Where Do You Stand?

Knowing the median earnings and minimum wage rates helps you judge whether an offer is competitive.

Median full-time earnings – According to the ONS Annual Survey of Hours and Earnings (ASHE) for 2025, the median gross annual salary for full-time employees was £39,039. That’s roughly £20.02 per hour at 37.5 hours per week. Half of full-time workers earn less than this, half earn more.

National Living Wage (NLW) – For workers aged 21 and over, the legal minimum from April 2026 is £12.71 per hour. At 37.5 hours per week, that’s about £24,785 per year. For 18–20 year olds the rate is £10.85 per hour, and for 16–17 year olds and apprentices it’s £8.00 per hour.

Real Living Wage – The voluntary rate set by the Living Wage Foundation is £13.45 per hour UK-wide and £14.80 in London for 2025-26. Many employers sign up to pay this, especially in sectors like retail, hospitality, and social care.

These figures give you a quick reference: an hourly rate below £12.71 is below the legal minimum for most adults; above £20 is around the national median; and anything above £25 is well above average.

Why a Post Tax Salary Calculator Matters for Comparisons

A salaried job might offer a higher headline figure, but an hourly job could include overtime premiums, shift allowances, or London weighting that boost your actual earnings. Conversely, a salaried role may include benefits like pension contributions, sick pay, or bonus schemes that aren’t reflected in the hourly rate.

A post tax salary calculator lets you input your specific hours, any overtime, and your tax code to see the net monthly pay. For example:

• £15 per hour at 37.5 hours/week → gross £29,250 → net around £2,165 per month (2026/27, standard tax code)
• £30,000 salary at 37.5 hours/week → gross £30,000 → net around £1,983 per month

Notice that the £30,000 salary gives a lower monthly net than the £15/hour job? That’s because the salary is based on 37.5 hours, while the hourly job might also include paid overtime. Always run the numbers with a calculator.

Overtime, London Weighting, and Other Factors

Overtime – Hourly jobs often pay time-and-a-half or double time for extra hours. Salaried roles may not pay extra for occasional overtime. If you expect to work more than your contracted hours, an hourly job could be more lucrative.

London weighting – Jobs in London and the South East often include an additional allowance to cover higher living costs. The Real Living Wage for London is £14.80, compared to £13.45 elsewhere. When comparing offers, factor in commuting costs and rent.

Holiday pay – Most workers are entitled to 5.6 weeks of paid leave per year. For hourly workers, holiday pay is usually calculated separately and paid when you take leave. Salaried workers have it built into their annual figure. A good post tax salary calculator will account for this.

Using the Hourly to Salary Tool

Our Hourly to Salary tool lets you switch between hourly and annual views. You can also explore salary articles for more detailed comparisons of specific occupations like NHS roles, teaching, or retail management.

Remember: the conversion is only as accurate as the assumptions you enter. If your hours vary week to week, use an average. If you have a student loan or pension contributions, those will reduce your net pay further.

Summary

• Use the standard formula: hourly rate × hours per week × 52 weeks.
• Compare offers using a post tax salary calculator to see real take-home pay.
• Check the National Living Wage and median earnings to gauge if an offer is fair.
• Consider overtime, London weighting, and benefits before deciding.

Whether you’re choosing between two jobs or negotiating a raise, knowing how to convert hourly to salary – and what you’ll actually keep after tax – puts you in control.