Hourly to salary, properly
Converting an hourly rate into a real salary
An hourly rate doesn’t tell you what someone earns for the year. Hours per week, weeks per year, paid leave, and a 13th cheque all reshape the number. The maths isn’t hard, but the SA conventions matter — and they differ from American or European defaults baked into most international tools.
The maths
- Weekly = hourly × hours per week
- Annual = weekly × weeks per year
- Monthly = annual ÷ 12
The defaults that fit a typical SA full-time arrangement: 45 hours/week, 52 weeks/year. The 45 isn’t arbitrary — it’s the BCEA ordinary-hours maximum (Section 9) for employees earning below the BCEA earnings threshold. Above that threshold the cap doesn’t apply, but most contracts still respect a similar working week.
52 weeks, not 48
SA labour law guarantees paid annual leave — currently 15 working days a year for a 5-day working week, plus public holidays. So you’re paid 52 weeks of the year even though you only physically work 48–49 of them. The standard hourly-to-salary calc uses 52 weeks.
The exception: casual or seasonal work where you’re only paid for weeks worked. In that case, subtract the unpaid weeks. A school-aligned job that takes 4 weeks of unpaid winter break would use 48 weeks.
Gross vs net (the take-home gap)
The calculator outputs gross. Before you take home a Rand, the following come off:
- PAYE — South African income tax, deducted at source by your employer via the EMP201 monthly return. Rates are progressive, published by SARS.
- UIF — 1% deducted, capped at the UIF salary ceiling published by labour.gov.za.
- Medical aid — if you contribute through payroll, your share comes off pre-tax (good for your tax bill).
- Retirement fund — pension or provident fund contributions, also pre-tax.
A rough rule of thumb for SA take-home: around 70% of gross at higher income bands, 80–85% at lower bands (where PAYE brackets bite less). For a precise figure, run the monthly gross through a PAYE calculator.
The 13th cheque trap
If your contract includes a 13th cheque (a December bonus equal to one month’s salary), your effective annual is 13 months’ salary, not 12. On R30,000/month with a 13th cheque, your annual is R390,000 — not R360,000. When comparing offers or negotiating a salary, get clear on whether the figure quoted includes the 13th cheque or not.
Don’t bake the 13th cheque into the hourly rate. Quote it separately. Otherwise an R150/hour rate looks the same whether the job includes a 13th cheque or not — and one is meaningfully better.
Freelance pricing vs employed pricing
If you’re a freelancer working out what to charge to match an employed peer, the equivalent hourly rate isn’t the same. Reasons:
- No paid leave. Use ~48 weeks/year, not 52.
- You pay your own retirement and medical aid. Roughly 15–25% on top of base salary in employed terms.
- Empty months happen. Even in-demand freelancers have slow periods. Price for an effective utilisation of 70–80%, not 100%.
- You carry the admin. Invoicing, chasing payment, your own bookkeeping, your own VAT (if registered).
Net of all four, 1.5–2× the equivalent employed hourly rate is the typical SA freelancer markup. Less than 1.5× usually leaves you worse off than a salary; more than 2× starts pricing yourself out of market for most clients.