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Contract to salary calculator
Enter a contract hourly rate, the hours and weeks you expect to bill, and what employee benefits are worth to you. See the yearly contract income and the salary it compares to.
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Your results
- Yearly contract income = hourly rate times billable hours per week times billable weeks per year.
- Equivalent salary = yearly contract income divided by one plus the benefits allowance. The 20 percent allowance and 46 weeks are adjustable estimates, not standard figures.
- Gross amounts before tax and deductions, in the currency you entered.
How to use it
- Enter the contract rate. Type the hourly rate you are offered or plan to charge. Use the rate you are paid, not what the client pays an agency, if the two differ.
- Set your billable time. Enter the hours per week and weeks per year you expect to be paid for. Lower the weeks if you expect unpaid holidays, sick days or time between contracts.
- Adjust the benefits allowance. Change the allowance to what a permanent job's paid leave, benefits and other employer costs would be worth to you, then compare the equivalent salary with the permanent offer you have.
Example
What was entered
- Contract hourly rate
- 60.00
- Billable hours per week
- 40 hours
- Billable weeks per year
- 46 weeks
- Benefits and costs allowance
- 20%
The result
- Yearly contract income (in your currency)
- 110,400.00
- Equivalent salary (in your currency)
- 92,000.00
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Related guides
Frequently asked questions
How do I convert a contract rate to a salary?
Multiply the hourly rate by the hours you bill each week and the weeks you bill each year, then divide by one plus your benefits allowance. At 60 an hour, 40 hours and 46 weeks, you earn 110,400 a year, and with a 20 percent allowance that compares to a salary of 92,000.
Why is the benefits allowance 20 percent?
It is only a starting estimate, not a standard figure. The right number depends on what a permanent job would give you, such as paid leave, health cover, retirement contributions or equipment, and what those would cost you to arrange yourself. Change it until it reflects your own situation.
Why not count 52 weeks?
If you are paid only for the hours you bill, holidays, sick days and gaps between contracts earn nothing. The default of 46 weeks is an assumption you can change. If your contract pays for time off, or you expect fewer gaps, raise the weeks to match.
Does the result include tax?
No. Both results are gross amounts before tax and deductions, in the currency you entered. Your take-home pay from a contract and from a salary depends on your own situation and the way you are engaged, so compare the two after checking your own figures.