Salary Calculator

What do I need to know about Standard Working Year in the UK?

A standard UK full-time employee works 37.5–40 hours per week, 52 weeks per year, minus 5.6 weeks statutory holiday (28 days including bank holidays) = approximately 46–47 working weeks per year. This gives approximately 1,748–1,880 working hours per year. Day rate calculation: annual salary ÷ 260 working days (52 weeks × 5 days) is the most common method. Some industries use 230 days (allowing for holidays) or 250 days.

What do I need to know about Freelance and Contract Day Rates?

Converting an employment salary to a freelance day rate requires adding overhead costs that an employer normally covers: employer NI (13.8%), pension contribution (typically 3–10%), holiday pay (12.07% of pay for 28-day entitlement), sick pay, equipment, and professional insurance. A common rule of thumb for freelancers: multiply your equivalent salary day rate by 1.35–1.5 to cover these costs. A £35,000 salary equivalent day rate of £154 should be charged at £208–231 as a freelancer to achieve the same effective income after accounting for holiday, sick pay, and gaps between contracts.

What do I need to know about National Living Wage 2026/27?

The UK National Living Wage (for workers 21+) is £11.44 per hour from April 2024. For 37.5 hours per week over 47 working weeks, this equals approximately £20,161 per year. The National Minimum Wage for 18–20 year olds is £8.60/hour; for under-18s, £6.40/hour; for apprentices in their first year, £6.40/hour. Employers must pay at least these rates — being paid below them is illegal and can be reported to HMRC's Pay and Work Rights helpline.

What should I know about Comparing Job Offers?

When comparing job offers with different structures, convert all to an annual equivalent using the same working-hours assumption. Consider total remuneration beyond base salary: pension contribution (5% employer match on £35,000 = £1,750/year), private health insurance (£500–1,500/year), life assurance (usually 2–4× salary), cycle-to-work scheme, and any performance bonus (should be treated as uncertain, not guaranteed). A £35,000 offer with 8% pension, health insurance, and a 10% bonus target is not directly comparable to a £38,000 offer with no benefits — always convert the full package to an equivalent total value before deciding, treating uncertain elements like bonuses conservatively.

What should I know about Pro-Rata Salary for Part-Time Work?

A pro-rata salary scales a full-time equivalent (FTE) figure down in proportion to hours worked. If a role is advertised at £30,000 FTE based on a standard 37.5-hour week, and you're working 22.5 hours a week, your actual salary is £30,000 × (22.5 ÷ 37.5) = £18,000. This calculation seems simple but is a common source of confusion in job offers, because employers sometimes quote the FTE figure prominently and the actual pro-rata figure in smaller print, or calculate pro-rata using a different baseline (such as days per week rather than hours, which gives a different result if full days are longer or shorter than average). When comparing part-time offers, always confirm what full-time hours figure the pro-rata calculation is based on, and recalculate it yourself using that baseline, since two employers quoting the same FTE salary can offer meaningfully different actual pay for the same part-time hours if their underlying full-time week length differs (for example, 35 hours versus 40 hours).

What's the key thing to understand about Gross Salary vs Total Package Value?

Gross salary is only one part of total compensation, and comparing job offers on salary figure alone can miss significant differences in overall value. Employer pension contributions above the statutory minimum, private health insurance, life insurance (death in service, often a multiple of salary), bonus structures, holiday allowance above the statutory minimum, and perks like a company car or gym allowance can add thousands of pounds of real value — or ongoing cost savings — that a headline salary comparison doesn't capture. A role offering a slightly lower salary but a notably higher employer pension contribution (say, 10% versus 3%) can be worth more in total compensation than a higher-salary role with only statutory minimum benefits, once the extra pension contribution is valued over a working lifetime. When comparing offers, it's worth listing every element of the package with an estimated annual value, rather than defaulting to whichever headline salary number is larger, since the gap in benefits can sometimes outweigh a modest difference in base pay.

Pension Contributions Change Your Real Hourly Value

<p>A headline salary or day rate tells only part of the story when comparing roles, because employer pension contributions, matched contributions above the statutory minimum, and benefits like private healthcare or extra holiday all add to total compensation without showing up in the number on an offer letter. Two jobs advertising the same salary can differ substantially in real value if one employer matches pension contributions up to 8% of salary and the other sticks to the statutory minimum of around 3%, since that difference compounds over a career. When working out a genuine hourly or daily equivalent for comparison, it helps to convert these extras into a cash-equivalent figure — the cost an employer would otherwise have to pay you directly to provide the same benefit — and add that to gross salary before dividing by hours worked. This is especially relevant when comparing a permanent role against freelance or contract day rates, since contractors receive no employer pension contribution at all and must build the equivalent provision into their day rate themselves.</p>

Worked Example: Converting a Day Rate to a Comparable Annual Salary

A contractor is quoted £350/day for a role and wants to compare it to a £65,000/year permanent salary offer. Using a standard working year of roughly 260 weekdays, minus typical annual leave and bank holidays (often modelled as around 230-235 billable/working days once unpaid gaps between contracts and non-working time are allowed for), £350 × 230 = £80,500/year gross equivalent if fully booked all year. But contractors usually don't bill every working day — allowing for a more realistic 200 billed days (accounting for gaps between contracts, admin time, and unpaid leave), the comparable figure drops to £70,000/year. From there, contractors typically also carry costs the permanent salary doesn't: employer's National Insurance (if operating via their own limited company), accountancy fees, insurance, pension contributions, and no paid sick leave or employer pension matching. After those are accounted for, the true comparison is often much closer to the permanent offer than the raw day-rate-times-days maths first suggests, which is why comparing total package value, not just headline pay, matters.

Gross Salary vs Realistic Take-Home Illustration

*Approximate figures for a typical UK employee on a standard tax code, assuming no pension contributions, student loan, or other deductions. Actual take-home depends on tax code, pension contributions, location (Scotland has different income tax bands), and the current tax year's thresholds, which change periodically — use the salary calculator's inputs for your specific situation rather than this illustrative table.