Income
True effective rate with unpaid time included
Add every hour the job consumes but does not pay for. This is the version to use when comparing roles with different commutes or unpaid setup expectations.
The Formula
True Rate = Salary / (Worked Hours + Commute Hours + Prep Hours)
Add every hour the job consumes but does not pay for. This is the version to use when comparing roles with different commutes or unpaid setup expectations.
| Symbol | Meaning | Unit | Notes |
|---|---|---|---|
| Hw | Annual hours actually worked | hours | Include overtime, weekend work and travel days that are part of the role. |
| Hc | Annual commuting hours | hours | Round trip daily time multiplied by working days. Exclude only if you would make the journey anyway. |
What Each Symbol Means
Hwhours
Annual hours actually worked
Include overtime, weekend work and travel days that are part of the role.
Hchours
Annual commuting hours
Round trip daily time multiplied by working days. Exclude only if you would make the journey anyway.
See It Worked With Real Numbers
A formula on its own does not tell you which number goes where. The how to convert a salary to an hourly rate page applies this equation to a concrete case, shows every intermediate step, and names the mistakes that produce a wrong answer even when the algebra is right.
Where This Formula Appears
This equation is the working core of How To Convert A Salary To An Hourly Rate, filed under Finance. Every number the guide produces comes from substituting into this one line.