Guide
Salary or hourly pay: compare the whole job offer
An hourly rate and an annual salary can describe similar pay in different ways. The useful comparison is the income and time each actual contract provides, including paid leave and the costs of doing the job.
Quick answer
Convert both offers to annual gross pay using their paid hours and paid weeks. Then compare guaranteed hours, paid holiday, pension and work costs. Do not subtract paid holiday from a salary paid all year or treat every hour at work as a paid hour.
On this page
Put both headline figures into the same units
For an hourly offer, multiply the rate by paid hours per week and paid weeks. At £15 × 37.5 × 52, annual gross is £29,250. Dividing by twelve gives a £2,437.50 calendar-month average, not a promise that every payday is identical.
For a salary, divide the annual figure by paid weeks and paid weekly hours. £40,000 ÷ 52 ÷ 37.5 = £20.512820…, displayed as £20.51 an hour. Keep £40,000 for the tax calculation: multiplying a rounded hourly display back up would lose money from the original salary.
The bidirectional converter also handles monthly, weekly, fortnightly and four-weekly quotes. Use a monthly average over the whole year when entering a monthly salary. Four-weekly and monthly payments are different calendars.
Paid hours are not always your time on site
If an eight-hour attendance day includes a 30-minute unpaid lunch, five such days mean 37.5 paid hours, not 40. At £15 an hour, that is £562.50 rather than £600 a paid week. Check breaks, training, travel between work locations and any other time the contract requires.
A converter is a comparison tool, not a minimum-wage compliance decision. HMRC's rules distinguish time work, salaried-hours work and other work types. Some deductions and premium payments also have special treatment. Use the dedicated official rules when checking whether particular hours must be paid.
Separately record unpaid commute or preparation time if it affects your decision. A job can have a higher paid hourly rate while requiring more of your time overall.
Paid holiday belongs inside a salaried year
If your salary is paid throughout the year, paid holiday is part of those paid weeks. Using 46.4 weeks instead of 52 simply because you take 5.6 weeks of paid leave makes the hourly equivalent look higher; it does not increase the salary.
Use fewer paid weeks only when those weeks genuinely have no pay under the arrangement. For example, £15 × 37.5 × 46 confirmed paid weeks gives £25,875 gross. Before using that as an employee's annual total, establish where their paid-holiday rights and money are included; do not assume an employer can remove paid leave by calling a week unpaid.
For term-time work, separate school weeks worked, contractual paid weeks and salary instalments. The term-time pay guide explains why an August bank payment does not necessarily mean every summer week is paid.
Compare guaranteed pay before optional extras
A £16 rate with uncertain shifts is not directly equivalent to a guaranteed 37.5-hour £15 rate. Put the guaranteed pattern first, then show realistic extra-shift scenarios separately. Do not rely on overtime to cover an essential bill unless the hours and payment are dependable.
Check the overtime threshold, rate, authorisation and whether it is pensionable. Time-and-a-half or double time comes from the applicable terms, not a universal UK premium. Use the overtime mode for an annual scenario after the contract rate is known.
Keep bonus, commission and allowances separate until their conditions and frequency are clear. If an advertised salary is FTE and the role is part-time, first establish the actual pro-rata offer.
Move from gross pay to the money and time left
Income Tax, NI, pensions and student loans can change the difference between offers. Put the actual annual gross into the main calculator, with the correct country, tax year and deductions. An annual estimate cannot reconstruct every payslip when work is concentrated into a few months.
Next compare costs you will actually pay: travel, parking, required childcare and equipment. An employer pension contribution or useful contractual benefit also belongs in the comparison, but it is not cash take-home. Avoid treating the same cost as both a pay deduction and an additional household expense.
The offer comparison helps include commute costs and time. Benefits and childcare support have their own eligibility rules; check them separately if the new income could change support.
Ask for a complete offer before deciding
A useful written question is: “Please confirm my actual annual gross pay or guaranteed paid hours, unpaid breaks, holiday allowance and holiday-pay method, pension contribution basis and any overtime or shift premiums. How many payments are made and when?”
Save the employer's answer with the contract. If two offers have different working patterns, make a small table with annual gross, reliable payment dates, pension, regular costs and total committed hours. That makes the trade-off visible without reducing the decision to one rounded hourly number.
Once you start, check the dates and hours on your first payslip against those terms.
What to do next
- Confirm paid hours, unpaid breaks and how much work is guaranteed.
- Count paid holiday once, and distinguish genuinely unpaid weeks from time off already paid.
- Compare deductions and costs using each confirmed annual amount.
- Convert the offers on the existing hourly/salary calculator.
- Ask the employer to confirm missing hours, holiday, pension and overtime terms.
- Use the offer comparison for travel costs and time after the gross figures are established.
Try the tool
Check your payslip or model a change.
Use the checker if you already have a payslip. Use the calculator if you want to model take-home pay or salary-sacrifice changes before payday.
About this guide
Written by Dan. Dan has spent 20 years working across payroll, HR, benefits and reward. IsMyPayRight is an independent personal project, not connected with any employer or with HMRC.
AI tools help with research and drafting. The official sources used are listed at the end of the guide.
This is general guidance, not a professional review of your circumstances. Read our editorial process and the corrections log.
Methodology and sources
See how the calculations work, which sources they use, how results are tested, and which payroll details the estimates cannot verify.
Common questions
- What is £15 an hour as an annual salary?
- At 37.5 paid hours and 52 paid weeks, £15 an hour gives £29,250 annual gross, or £2,437.50 as a calendar-month average. Different paid hours or weeks change the result.
- Should I subtract paid holiday from 52 weeks?
- Use 52 paid weeks for a salary paid throughout the year, including paid holiday. Subtract only genuinely unpaid weeks under the arrangement, after checking where holiday pay is included.
- Does an equivalent hourly rate prove minimum-wage compliance?
- No. Work type, counted hours, deductions and premium treatment have their own HMRC rules. The converter compares entered gross amounts.
Official sources
Use these references to check the rules behind this guide. Check the tax year and your circumstances before applying an example to your own pay.