I want to know how to calculate a fixed salary based on my hourly rate. (because I regularly work on a hourly rate, but I might consider full-time positions) I don't need an exact figure, just some guidance or estimation.

I'm a PHP developer mostly, I live in Argentina but work for companies abroad, usually American, so both freelance rates and fixed salaries are just what I'm paid, no benefits like health insurance, although I do get paid holidays on full-time jobs.

Also, I'm not looking for someone to tell me what figure to ask for, just a ballpark relation to my hourly rate. For example: Ask for 80 times your hourly rate as a monthly salary, which would be equal to a 4 hour day freelance work.

I don't expect to be paid what I would do if I worked 8 hour days with my freelancing hourly rate because nobody would pay me that.

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  • 1
    What is the current rate, out in the market, for what you do? – Dave Gremlin Jan 8 at 23:24
  • 1
    Probably better on freelancing.stackexchange. – The Wandering Dev Manager Jan 9 at 0:27
  • 1
    Possible duplicate of How can I determine a reasonable salary to ask for? – gnat Jan 9 at 4:20
  • I question your arithmetic when you say "Ask for 80 times your hourly rate as a monthly salary, which would be equal to a 4 hour day freelance work" - it seems to me that you are working 20 hours per day?! – Mawg Jan 9 at 7:20
  • Maybe I am missing something - but he seems to say that 80 hours salary (in a month, I agree, but that doesn't matter) is equal to four days current pay. In any, it's not really important. @DaveGremlin has given him the answer (as a comment, so I expanded on it as an answer - sorry, Dave). – Mawg Jan 9 at 7:32

Usually, the question goes the other way, and the usual answer in the US is "Take your direct salary, calculate the equivalent hourly rate, and double it."

To be exact: take your annual salary, drop three zeroes off the end, and that's your approximate hourly rate FOR YOUR CURRENT LOCATION.

Based on that, take your current hourly rate, divide by two, multiply by 40 (for 40 hours/week) and again by 4.3 (for 4.3 weeks average per month).

The catch is that, if you are going to be relocating, you have to adjust for cost-of-living differential. I had to explain to a recruiter recently that relocating from where I am now to the San Francisco Bay Area would require an absolute minimum of a 93% pay raise JUST TO BREAK EVEN on cost-of-living differential. I had a similar conversation with another recruiter, easily twenty years ago. Back then, the differential was "only" 50% or so.


@DaveGremlin’s comment is correct.

You don't need a formula, and it’s not going to help you.

Jobs pay what they pay, and saying “my formula disagrees” Is not going to get you anywhere.

The simple answer is to look at job boards, GlassDoor, etc and see what jobs in your area of expertise and geographical area pay.

Get a ballpark idea for there and it will be realistic. There is no magic formula which will be more realistic.

Also, the last line of your question:

I don't expect to be paid what I would do if I worked 8 hour days with my freelancing hourly rate because nobody would pay me that.

seems to indicate that oyu already have apretty good diea of the answer.


You need to assure that you earn (after taxes / deductions, with the benefits added) at least as much as you did as freelancer or it makes (at least financially) no sense to switch.

From experience I can say, if a company is willing to pay a freelancer X amount per day, they'll be willing to do the same for an employee (usually including benefits, but negotiable).

If they want you really badly, you can even ask for more as an exclusive or signing bonus, I did.

Remember you might gain benefits like paid holidays / parental leave, reliable, constant income (at least usually) and better worker protections but you also lose a lot of freedom, tax deduction possibilities, and time flexibilities.

How about the fact that you're your own boss and any slave labour/overtime or whiny client you can chose to take on or kick to the curb by your on volition.

Try turning that into an amount per annum.

Benefits like healthcare plans are something you can have as a freelancer (though often at higher premiums), so are just another amount to include in the calculation.

Tax rates differ greatly between employee and freelancer, be vigilant.

Keep also always in mind:
permanent contracts, as nice as they sound, are never permanent and any fluke within the company or industry can render you unemployed.

If you want to go mathematical:
(no warranties, it's late and I'm just messing around)
Fh = your hourly freelance rate
Fa = your annual freelance rate
I = your actual, past annual average freelance income
P = your actual, past annual average freelance profit
B = employee benefits measured in money, kaching
Df = your taxes and deductions as freelancer
De = your taxes and deductions as employee
Wa = working days per year
Wh = hours per work day
S = your employee salary

Wa = 260
Wh = 8

Fa = Fh x Wh x Wa
S = Fa - B

P = I - Df

(S - De) >~ P

Calculating P is redundant since you can read it on your tax returns but meh, I included it for fun and a semblence of consistency / clarity ...

Also, some expenses like office, liability insurance or hardware / software are mostly not required for employees.

Oh and yes, if you relocate, account for cost of living differences, just like John R. Strohm said.

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