Calculating Your Hourly Wage: The Right Formula and the Most Common Mistakes
The question sounds trivial: what do I actually earn per hour? As soon as you try to answer it properly, it turns out to have several layers. There is not one correct figure but at least two — the contractual hourly rate, which divides your monthly salary by your agreed working time, and the real hourly rate, which counts only the hours you genuinely spend at work. Both have their place, and both are regularly miscalculated.
The basic formula
The contractual hourly rate is your gross monthly salary divided by your average monthly hours. Those monthly hours are your weekly working time multiplied by 4.345. Written out: hourly rate = monthly gross ÷ (weekly hours × 4.345). If you need the other direction, simply invert it: monthly gross = hourly rate × weekly hours × 4.345. You can switch between both directions with a single click in the hourly wage calculator.
The factor 4.345 causes a lot of confusion, yet it is plain arithmetic. A year has 365 days; divided by seven weekdays that gives 52.143 weeks. Spread across twelve months, 4.345 weeks remain per month. A month is not four weeks long but a good four weeks and two and a half days. Some collective agreements use 4.33 or fix monthly hours at 173 — the difference is around 0.3 percent and is negligible when comparing two job offers.
An example: on a gross monthly salary of €3,200 and a 40-hour week you arrive at 40 × 4.345 = 173.8 monthly hours. €3,200 divided by 173.8 gives a contractual hourly rate of €18.41. Over a year that is 2,085.7 contractual working hours and €38,400 gross annual pay. This figure is the basis for every further step.
Mistake 1: the 160-hour rule of thumb
By far the most common error is assuming a month has 160 working hours — four weeks of 40 hours each. That rule of thumb understates actual monthly working time by 13.8 hours, or almost eight percent. In our example it would show an hourly rate of €20.00 instead of €18.41. Anyone using it to evaluate a salary offer or to price their own time systematically makes themselves richer on paper than they are. When negotiating premiums or the payment of individual extra hours, that error costs real money.
Mistake 2: putting additional payments in the wrong pot
A 13th monthly salary, holiday pay or an annual bonus do not belong in the monthly formula — they would distort the contractual hourly rate because in eleven of twelve months they are simply not paid. For the annual view, however, they are indispensable. Someone on €3,200 a month plus a full 13th salary reaches €41,600 a year; the rate across the whole year therefore rises from €18.41 to €19.95. When comparing two offers, always set the annual packages against each other rather than the monthly figures — otherwise the offer without additional payments appears to win.
Mistake 3: counting holiday and public holidays as worked
The contractual hourly rate treats paid holiday and public holidays as though you had worked them. For payroll purposes that is correct; for the question "what does an hour of actual work bring me?" it is misleading. Let us do the sums: on a five-day week a year holds 5 × 52.143 = 260.7 working days. Deduct 30 holiday days and 10 public holidays and 220.7 days of eight hours remain, that is 1,765.7 hours genuinely worked. The €38,400 annual gross is therefore spread across far fewer hours — the real hourly rate rises to €21.75, some 18 percent above the contractual figure.
Mistake 4: ignoring unpaid overtime
The holiday effect works in your favour — unpaid extra work turns it back again. Two unpaid hours a week add up to 88 hours a year across the 44.1 weeks actually worked. The real hourly rate consequently falls from €21.75 to €20.71. At five unpaid hours a week it is 221 hours a year and the real rate drops to €19.33. Legally more important still: every hour worked counts towards the statutory minimum wage, including the unpaid ones. The hourly wage calculator therefore reports both figures separately and runs the minimum wage check explicitly on the hours including extra work.
From the hourly rate back to a monthly salary
You need the reverse direction whenever an offer is expressed as an hourly rate — typical for fixed-term contracts, temporary work or collectively agreed pay scales. The same 4.345 factor applies: an hourly rate of €16.50 on 35 weekly hours gives 16.50 × 35 × 4.345 = €2,509 gross per month. It is worth translating that figure into net pay, because that is where it is decided what actually remains. The gross-to-net salary calculator does that, taking tax class, federal state and social contributions into account.
Conclusion: two figures for two purposes
Use the contractual hourly rate when comparability matters — when weighing two job offers, judging a collective agreement or running a minimum wage check. Use the real hourly rate when you want to know what your time genuinely earns: when deciding on reduced hours, weighing up a longer commute, or asking whether unpaid extra work still adds up. Both values sit side by side in the calculator — and the gap between them is often the most revealing figure of all.