Using a Salary Calculator to Compare Hourly and Salaried Jobs

When you're weighing up job offers, one of the most common questions is: Is this hourly rate better than that annual salary? A salary calculator helps you make a fair comparison by converting hourly pay into annual figures and vice versa. But the answer depends on your contracted hours, overtime rules, and any location-based allowances like London weighting.

This article explains how to convert between hourly and annual pay using UK benchmarks from the Office for National Statistics (ONS), the National Living Wage (NLW), and public sector pay scales such as the NHS. We'll also cover what to watch out for when comparing offers.

How to Convert Hourly Rate to Annual Salary

The standard formula used by employers and HMRC is:

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

For example, if you earn £15 per hour and work 37.5 hours a week (common in NHS and many office roles), your gross annual salary is:

£15 × 37.5 × 52 = £29,250

If you work 40 hours a week (typical in retail or hospitality), the same hourly rate gives:

£15 × 40 × 52 = £31,200

That's a difference of nearly £2,000 a year, simply because of the hours assumption. Always check your contract for your exact weekly hours. Some roles use 37.5, others 40, and some may be 35 (e.g., civil service). A few employers calculate using 52.14 weeks (365.25 ÷ 7), but the PAYE system runs on 52 weeks, so the difference is minimal (under £40 per year on NLW).

Our Hourly to Salary tool lets you enter your rate and hours to see gross and net figures instantly.

UK Wage Benchmarks: What Does 'Average' Mean?

The ONS Annual Survey of Hours and Earnings (ASHE) for April 2025 gives the most authoritative picture:

• Median full-time annual earnings: £39,039 (up 4.3% from £37,439 in 2024)
• Median full-time hourly earnings (excluding overtime): £19.67 (up 5.4% from £18.66)
• Median full-time weekly earnings: £766.60 (up 5.3% nominal, 1.1% real after CPIH inflation)

These figures are for employees who have been in their job for at least a year. Part-time workers typically earn less per hour and have lower annual totals.

At the lower end, the National Living Wage for workers aged 21 and over was £12.21 per hour in April 2025. From April 2026, it rises to £12.71 per hour (GOV.UK rates). For a 37.5-hour week, that gives an annual gross of £24,784.50. The separate Real Living Wage (voluntary, set by the Living Wage Foundation) is £13.45 per hour UK-wide and £14.80 in London for 2025-26.

Public sector pay scales offer another reference. The NHS Employers 2026/27 pay scales show:

• Band 1 (closed to new entrants): £25,272 annual, £12.92 hourly
• Band 5 (newly qualified nurse): £29,970 annual, £15.37 hourly (37.5-hour week)
• Higher Cost Area Supplements (HCAS) add between £5,794 and £8,746 per year for London and surrounding areas.

Comparing Hourly vs Salaried Offers: Key Factors

When you use a salary calculator to compare an hourly job with a salaried one, consider these points:

1. Contracted hours: A salaried role may require more than your contracted hours without overtime pay. Check your contract for 'reasonable additional hours' clauses.
2. Overtime: Hourly jobs often pay overtime (1.5× or 2× for extra hours). Salaried roles may not pay extra for occasional overtime.
3. Holiday and sick pay: Salaried employees typically get full pay during holidays and sick leave. Hourly workers may only get statutory holiday pay (12.07% of earnings) and may not have sick pay.
4. London weighting: If the job is in London or the South East, check whether the salary includes a London allowance. For example, NHS inner London HCAS adds up to £8,746 per year. Private sector allowances vary but can be 20–30% of base salary.
5. Pension and benefits: Salaried roles often come with employer pension contributions, health insurance, and other perks. Factor these into your total compensation.

Our salary articles cover more detailed comparisons, including how to value benefits.

Real-World Examples Using the Salary Calculator

Let's look at a few common scenarios using 2026/27 rates:

• £12.71/hr (NLW) at 37.5h/week: Gross £24,784.50, net monthly take-home ~£1,780 (England, no pension/student loan).
• £15/hr at 37.5h/week: Gross £29,250, net monthly ~£2,048.
• £20/hr at 37.5h/week: Gross £39,000, net monthly ~£2,633.

A job advertised at £30,000 annual salary works out to:

• £15.38/hr at 37.5h/week
• £14.42/hr at 40h/week

So if you're comparing a £30,000 salaried role with an hourly job paying £15/hr, the salaried role is slightly better at 37.5 hours but worse at 40 hours. Always run the numbers with your specific hours.

Caveats and Limitations

• Hourly-to-salary conversions assume a steady contracted week with no unpaid overtime, bonus, tips, or salary sacrifice.
• Actual take-home pay depends on your tax code, pension contributions, student loan repayments, and benefits in kind.
• The ONS ASHE figures are based on a 1% sample of PAYE records and are provisional for 2025.
• London weighting is not universal; always check the job description.

For the most accurate picture, use our hourly calculator with your specific details, and consult your contract and official GOV.UK guidance.

Summary

A salary calculator is an essential tool for comparing hourly and salaried job offers. Remember the conversion formula (rate × hours × 52), check your contracted hours, and factor in location allowances and benefits. The UK median full-time salary is around £39,039, while the National Living Wage provides a floor of £12.71 per hour from April 2026. Whether an hourly rate or a salary is better depends on your personal circumstances, but with the right benchmarks you can make an informed decision.