Knowing your true hourly rate is the single most clarifying number in your career. It tells you what your time is actually worth — and what you should say no to.
Ask ten experts and you will get twelve answers. The underlying math, thankfully, only has one. Knowing your true hourly rate is the single most clarifying number in your career. It tells you what your time is actually worth — and what you should say no to.
Annual salary ÷ 52 weeks ÷ 40 hours. $80,000 → $38.46/hr.
Subtract paid leave that you wouldn't otherwise take. Add commute time. Subtract taxes. $80,000 often ends near $22/hr take-home for an hour of actual life.
Freelancers should aim for 2–3× the equivalent employee hourly rate to cover own taxes, no-PTO, downtime and business overhead.
If your work directly drives revenue, ask for variable comp. A 5% commission can dwarf a 5% raise.
Does this include benefits? Add 10–25% for benefits if you're comparing to a self-employed offer.
Why does this number feel low? Because life rarely matches the marketing slide. The honest number motivates better choices.
Whatever number you land on, sanity-check it against a second method or a quick estimate in your head.