Salary Calculator

This is gross pay, and that is on purpose

The figure this returns is what the work is worth before any deduction. Income tax, national insurance or its local equivalent, pension contributions and student loan repayments all come out afterwards.

A calculator that guessed those would need your tax code, your allowance, your pension scheme, your student loan plan and the country you are taxed in, and it would still be wrong often enough to be dangerous on a document you send to someone.

For a take home figure, use the tax authority's own calculator for your country. For quoting a rate, costing a job or checking an offer, gross is the number you want anyway.

How many weeks are there in a working year

Fifty two is the usual answer and it is slightly short: a year is 52.14 weeks, which is why annual pay divided by 52 is a few pounds above a true weekly figure.

An employee on a salary is paid for all of them, holiday included. A contractor is not. If you are pricing your own time, dropping to 46 or 48 paid weeks allows for holiday, public holidays and the weeks you are ill or between clients.

This is the single biggest reason a contract rate that looks generous against a salary turns out not to be.

Monthly is the annual figure over twelve

Multiplying a weekly figure by four is the mistake to avoid: four weeks a month is a 48 week year, and it understates monthly pay by about eight per cent.

Divide the annual figure by twelve instead. That is what a monthly payroll actually does, which is why some months contain five paydays for weekly staff and the monthly figure never changes.

Going the other way, an annual salary becomes an hourly rate by dividing by the hours in a week and then by the paid weeks in the year.

What an employee gets that a contractor has to buy

• Paid holiday, which in the United Kingdom is a statutory 5.6 weeks and may include public holidays.
• Paid sick leave, in whatever form the country or the employer provides.
• An employer pension contribution.
• The employer's own payroll taxes, which never appear on a payslip but are a real cost of employing someone.
• Equipment, insurance, training and the unpaid hours spent finding the next piece of work.

Comparing a day rate with a salary means adding all of that back. A common rule of thumb is that a contract rate needs to be substantially above the salaried equivalent before the two are level, and the gap is wider for shorter contracts.

Holiday is not the same everywhere

The United Kingdom sets a statutory minimum of 5.6 weeks a year, which employers may count public holidays towards.

Australia sets four weeks of annual leave plus public holidays, with more for shift workers, and adds long service leave.

Canada sets minimums province by province, usually starting at two weeks and rising with length of service.

The United States has no federal statutory minimum paid holiday at all, which is why an American salary and a European one are not comparable on the headline figure alone.