Comparing Hourly Jobs with Salaried Offers: Your Guide to UK Take Home Pay

When you're weighing up a job offer, the headline figure – whether it's an hourly rate or an annual salary – is only part of the story. What really matters is your UK take home pay: the amount that lands in your bank account after tax, National Insurance, and any deductions. This guide explains how to compare hourly and salaried offers fairly, using the latest official benchmarks.

The Basics: Converting Hourly to Annual Salary

The standard conversion used by most employers is:

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

For a typical full-time week of 37.5 hours, that means:

• £12.71 per hour (National Living Wage from April 2026) → £24,784.50 per year
• £20.00 per hour → £39,000 per year
• £25.00 per hour → £48,750 per year

These figures are gross – before any deductions. To get your UK take home pay, you need to subtract Income Tax, National Insurance, and any pension or student loan repayments. Use our hourly to salary calculator to see the net figures for your specific situation.

Official Benchmarks: What the Median Worker Earns

The Office for National Statistics (ONS) Annual Survey of Hours and Earnings (ASHE) provides the most reliable picture of UK earnings. For April 2025:

• Median gross annual earnings for full-time employees: £39,039
• Median hourly earnings (excluding overtime) for full-time employees: £19.67 per hour
• Median weekly earnings for full-time employees: £766.60

These figures are useful reference points. If you're offered £20 per hour, you're slightly above the median. If you're offered £12.71 per hour (the National Living Wage), you're well below it – but that's the legal minimum for workers aged 21 and over.

The National Living Wage and National Minimum Wage

From April 2026, the main rates are:

• £12.71 per hour for employees aged 21 and over (National Living Wage)
• £10.85 per hour for employees aged 18–20
• £8.00 per hour for employees aged 16–17 and apprentices

These are statutory minimums. Many employers pay more, especially in sectors like healthcare, technology, and finance. For public sector roles, such as NHS and teaching, pay scales are set nationally and often include London weighting.

Why Take-Home Pay Differs Between Hourly and Salaried Roles

Even if the annual gross amount is the same, your UK take home pay can vary because of:

1. Paid holiday – Salaried employees typically get 5.6 weeks (28 days) of paid leave. Hourly workers are also entitled to this, but it may be paid separately or rolled into the hourly rate. If your hourly rate includes rolled-up holiday pay, the headline figure is higher than your true rate for hours worked.

2. Overtime – Salaried roles often include overtime at a premium (e.g., 1.5x or 2x) or may not pay extra at all. Hourly workers are usually paid for every extra hour, often at a higher rate. Remember that overtime is taxed at your marginal rate – you keep about 72p per pound on basic rate, or 58p once you enter the higher rate band.

3. Pension contributions – Many employers offer workplace pensions with contributions taken before tax. This reduces your taxable income but also lowers your take-home pay. The NHS Pension and Teachers' Pension have their own contribution tiers.

4. London weighting – If you work in London, you may receive an additional allowance (often 10–20% of base pay). This is more common in salaried roles, especially in the public sector.

How to Compare a Job Offer: Step by Step

1. Convert both offers to the same basis. If one is hourly and the other is salaried, annualise the hourly rate using your expected weekly hours and 52 weeks. Or divide the salary by those hours to get an hourly equivalent.

2. Estimate your UK take home pay. Use a salary calculator that accounts for your tax code, pension contributions, and student loan repayments. The standard 1257L tax code gives a Personal Allowance of £12,570.

3. Factor in non-pay benefits. Paid holiday, sick pay, pension matching, bonuses, and flexible working all have value. A lower hourly rate with better benefits may be worth more than a higher rate with none.

4. Check the hours. A £35,000 salary for a 40-hour week is worth less per hour than the same salary for 37.5 hours. Always ask about the expected working pattern.

Example: Comparing a Salaried Offer with an Hourly Offer

Suppose you have two offers:

• Salaried: £39,000 per year, 37.5 hours per week, 5.6 weeks paid holiday, 5% employer pension contribution
• Hourly: £20.00 per hour, 37.5 hours per week, holiday pay included in the rate, no pension

At first glance, both have the same gross annual value (£39,000). But after tax and NI, the salaried role may give slightly higher take-home pay because the pension contribution reduces your taxable income. However, the hourly role might offer more flexibility and overtime opportunities. Use our salary data to see typical take-home pay for different rates.

Key Takeaways

• Always compare UK take home pay, not just gross figures.
• The median full-time worker earns about £39,039 gross, or roughly £30,500–£31,000 after tax and NI.
• The National Living Wage is £12.71 per hour from April 2026.
• Use 37.5 hours per week as a typical assumption, but check your contract.
• Overtime, pension contributions, and London weighting can significantly change your net income.

For more guidance, explore our topics on salary negotiation and tax calculations. And remember: your contract is the final authority – always read the small print.