Converting an hourly rate to an annual salary sounds simple — multiply hours by weeks — but the number that matters for budgeting is your take-home pay after income tax and National Insurance. This hub covers the conversion formulas, the National Living Wage rates for 2026/27, take-home pay at common hourly rates, and what the difference between hourly and salaried employment means for your finances.
National Minimum Wage and National Living Wage rates April 2026
The National Living Wage applies to workers aged 21 and over. The National Minimum Wage applies to younger workers and apprentices.
| Worker category | Hourly rate from April 2026 | Annual gross (37.5hr week) | Annual gross (40hr week) |
|---|---|---|---|
| Aged 21 and over (NLW) | £12.21 | £23,810 | £25,396 |
| Aged 18–20 | £10.00 | £19,500 | £20,800 |
| Under 18 (not an apprentice) | £7.55 | £14,723 | £15,704 |
| Apprentice | £7.55 | £14,723 | £15,704 |
Apprentice rate applies to apprentices under 19, or in their first year of an apprenticeship regardless of age. After the first year, apprentices over 19 are entitled to their age group’s rate.
How to convert hourly rate to annual salary
The formula depends on your contracted hours:
| Hours per week | Formula | Example at £15/hour |
|---|---|---|
| 37.5 hours | rate × 37.5 × 52 | £15 × 37.5 × 52 = £29,250 |
| 40 hours | rate × 40 × 52 | £15 × 40 × 52 = £31,200 |
| Part-time (20hrs) | rate × 20 × 52 | £15 × 20 × 52 = £15,600 |
| Part-time (16hrs) | rate × 16 × 52 | £15 × 16 × 52 = £12,480 |
Holiday pay is included in salaried equivalents above — it assumes 52 weeks of pay including paid annual leave.
Take-home pay at common hourly rates (2026/27)
The figures below assume a standard 37.5-hour week, standard personal allowance (£12,570), and no other income or deductions.
| Hourly rate | Annual gross | Income tax | Employee NI | Annual take-home | Monthly take-home |
|---|---|---|---|---|---|
| £10.00 (NMW 18–20) | £19,500 | £586 | £551 | £18,363 | £1,530 |
| £12.21 (NLW) | £23,810 | £1,248 | £891 | £21,671 | £1,806 |
| £13.00 | £25,350 | £1,556 | £1,022 | £22,772 | £1,898 |
| £15.00 | £29,250 | £2,736 | £1,342 | £25,172 | £2,098 |
| £17.00 | £33,150 | £4,116 | £1,646 | £27,388 | £2,282 |
| £20.00 | £39,000 | £5,286 | £2,115 | £31,599 | £2,633 |
| £25.00 | £48,750 | £7,236 | £2,894 | £38,620 | £3,218 |
Figures are illustrative — actual deductions vary with pension contributions, student loan repayments, and tax code.
Worked example — comparing a job offer
Aisha is choosing between two roles:
Option A: Salaried position at £28,000/year, 37.5 hours/week. 28 days paid holiday. Employer pension 5%.
Option B: Hourly position at £15.50/hour, 37.5 hours/week, with overtime available. No employer pension contribution beyond statutory minimum (3%).
Gross comparison:
- Option A: £28,000/year
- Option B: £15.50 × 37.5 × 52 = £30,225/year (without overtime)
Take-home comparison (approximately):
- Option A: £22,700/year (~£1,892/month)
- Option B: £25,900/year (~£2,158/month)
But Aisha’s employer pension contributions add value to Option A:
- 5% employer contribution on £28,000 = £1,400/year extra in her pension
- Option B’s statutory 3% on £30,225 = £907/year
Option B is richer in gross and net pay. Option A is safer and includes £493 more in employer pension per year. The right choice depends on whether she can rely on overtime and how much she values income certainty.
Salaried vs hourly pay — key differences
| Factor | Hourly pay | Salaried pay |
|---|---|---|
| Pay certainty | Varies with hours worked | Fixed regardless of hours |
| Overtime | Typically paid (at rate or enhanced) | Often not separately compensated |
| Notice and layoffs | Often shorter notice periods | Usually more protection |
| Sick pay | Often statutory minimum only | Employers often offer enhanced sick pay |
| Flexibility | Hours can be varied by employer | Predictable working week |
| Benefits | Less common | Pension, health, EAP more common |
Holiday pay for hourly workers
If you are paid hourly, holiday pay must be at least the same rate as your normal hourly rate. For irregular hours workers, holiday pay is calculated as an average of the previous 52 weeks’ pay.
Rolled-up holiday pay — where employers include a holiday pay supplement in the hourly rate (typically 12.07%) — has been re-legalised in the UK from April 2024 for irregular-hours workers under a simplified framework.
Cluster articles in this section
- Hourly to Salary Calculator UK
- Salaried vs Hourly Pay UK
- £10 per Hour Annual Salary
- £12 per Hour Annual Salary
- £15 per Hour Annual Salary
- £17 per Hour Annual Salary
- £20 per Hour Annual Salary
- £25 per Hour Annual Salary
Related hubs
- Take-Home Pay Hub — gross to net pay calculations for salaries
- Salary by Profession Hub — benchmarks by job role
- Self-Employment Hub — day rates, IR35, sole trader vs limited company
- Tax Hub — income tax, National Insurance, tax codes
Common mistakes when converting hourly pay
| Mistake | Why it matters |
|---|---|
| Using 52 weeks without allowing for unpaid leave | If you take unpaid time off, gross pay is lower |
| Forgetting National Insurance | Many people estimate tax but forget NI — which adds another 8% for basic rate earners |
| Ignoring the personal allowance | The first £12,570 of earnings is tax-free — not all your gross pay is taxed |
| Treating gross pay as take-home | For someone on £15/hour, gross is £29,250 but take-home is closer to £25,000 |
| Assuming all jobs negotiate hourly | Many employers only offer salaried positions — know which structure your sector uses |