Clock In Calc

Real hourly wage calculator

This calculator shows your real hourly wage: the money you keep after work costs, divided by all the hours the job takes, including unpaid time. It is for anyone who wants to compare jobs on the same basis.

Your contract divides pay by the hours you are paid for. This divides what you keep by the hours the job really takes. Leave anything blank that does not apply to you.

What you are paid
Unpaid time, on a working day
What the job costs you
–

Fill in your pay and hours to see your real rate.

or press Ctrl D (⌘ D Mac)

What this calculator measures

Your contract rate divides pay by paid hours. This tool divides what is left after work costs by all the hours the job takes. The two numbers differ because the job uses more hours than it pays for.

The idea comes from Joe Dominguez and Vicki Robin in their 1992 book Your Money or Your Life. They used it to compare a job against the life it uses, not to find a smaller number for its own sake.

This tool converts every figure to a year and divides once. That avoids mixing per-day and per-week rates.

What counts as unpaid time and work costs

Unpaid time is any time the job takes that you are not paid for. Common examples:

Work costs are money you spend because you are at work. Common examples:

The tax field is a percentage you supply. This page does not calculate your tax. For a US estimate, use the paycheck calculator.

Judgement calls you have to make

Some costs are not clear-cut. A lunch you would have eaten anyway is not wholly a cost of working. Childcare may not belong entirely to the job. A long commute you chose for a cheaper house is a trade you made, not a cost the job imposed.

You decide what to include. The result is only as good as your inputs.

The number can come out negative. That means the job costs more than it pays. It is a real answer, not an error.

Worked example

Suppose you earn $52,000 a year. You enter a tax rate of 20 percent. Work costs are $3,000 for the year. Paid hours are 2,080. Unpaid time adds 10 hours a week for 50 weeks, which is 500 hours.

Pay after tax: $52,000 minus 20 percent = $41,600. Subtract work costs: $41,600 minus $3,000 = $38,600. Total hours: 2,080 + 500 = 2,580. Real hourly wage: $38,600 divided by 2,580 = $14.96.

The contract rate was $25.00 per hour ($52,000 divided by 2,080). The real rate is $14.96.

What to do with the result

Use it to compare two jobs on the same basis. A job with a higher contract rate may have a lower real rate after a long commute and unpaid overtime.

Use it to see what one change is worth. Moving closer, dropping one commuting day, or cutting unpaid overtime can raise your real rate.

For hours and decimal conversions, see the hours calculator. For salary to hourly, see the salary calculator.

This result is an estimate. Your employer's payroll is the record.

Frequently asked questions

What is a real hourly wage calculator?

It divides the money you keep after work costs by all the hours the job takes, including unpaid time. The contract rate divides pay by paid hours only. This tool shows the difference.

How do I calculate my true hourly wage?

Take your annual pay, subtract the tax percentage you enter, subtract your yearly work costs, then divide by paid hours plus unpaid time. The result is your real hourly wage.

What counts as unpaid time for this calculator?

Commute both ways, getting ready, unwinding afterwards, and unpaid overtime. Add any other time the job takes that you are not paid for. You decide what to include.

Can my real hourly wage be negative?

Yes. A negative number means the job costs more than it pays. That is a real answer, not an error. It can happen with high work costs and many unpaid hours.

Does this calculator work out my tax?

No. The tax field is a percentage you supply. This page does not calculate your tax. For a US estimate, use the paycheck calculator. Your employer's payroll is the record.