Should commuting count as work time?

It is time you would not spend otherwise, so including it gives the most honest comparison between jobs. Remote roles look considerably better on this measure.

Is this before or after tax?

Before tax, since rates vary by jurisdiction. Enter your net pay instead of gross salary if you want an after-tax rate.

How do I use this when freelancing?

Include unbilled admin, marketing and invoicing hours. Freelancers commonly bill only 50–70% of the hours they work.

Hourly Wage Calculator

Your effective hourly rate is not simply salary divided by contracted hours. Unpaid overtime, commuting time and work-related costs all change the picture — this calculator includes them.

Fill in the fields above and select Calculate to see your result and the full working.

Please note: Financial calculators produce estimates using the figures you enter. They exclude fees, taxes, insurance and rate changes unless a field asks for them. They are not financial advice — confirm any significant decision with a qualified adviser or your lender.

Formula used

Real hourly rate = (salary − work-related costs) ÷ ((contracted + overtime + commuting hours) × weeks)

How to use this calculator

Enter your gross annual salary.
Add contracted hours, plus honest estimates of unpaid overtime and commuting time.
Set working weeks — deduct paid holiday if you want to know the rate for weeks actually worked.
Include work-only spending such as travel and parking to see the true figure.

Example calculation

$55,000 salary, 40 contracted hours, 5 unpaid overtime, 5 commuting, 48 weeks, $2,500 costs:

Nominal = 55,000 ÷ (40 × 48) = $28.65/h

Real hours = 50 × 48 = 2,400

Real = (55,000 − 2,500) ÷ 2,400 = $21.88/h — about 24% lower.

What does this result mean?

The gap between nominal and real rates is the hidden cost of a job. A role paying more but demanding an hour's commute each way and regular unpaid evenings can easily deliver a lower effective rate than a quieter, closer, lower-paying one. It is also the number to use when deciding whether to outsource a task: if a job pays less per hour than your real rate, paying someone else can be rational.

Frequently asked questions

Should commuting count as work time?: It is time you would not spend otherwise, so including it gives the most honest comparison between jobs. Remote roles look considerably better on this measure.
Is this before or after tax?: Before tax, since rates vary by jurisdiction. Enter your net pay instead of gross salary if you want an after-tax rate.
How do I use this when freelancing?: Include unbilled admin, marketing and invoicing hours. Freelancers commonly bill only 50–70% of the hours they work.

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