What this calculator does
Pricing something in hours rather than dollars changes what the number feels like without changing what it is. The arithmetic is a division: the price over your hourly rate. The part worth getting right is which hourly rate you divide by.
A nominal rate, take-home pay over hours worked, overstates what an hour is worth to you. Commuting is time you spend on work but are not paid for, and transport, lunches and the rest are money you spend in order to earn. Taking both out gives an effective rate that is usually noticeably lower. On the defaults here, $36.84 nominal becomes $29.77 effective, about 19% less.
The formula
The nominal hourly rate is take-home pay divided by hours worked. The effective rate subtracts the weekly costs of working from the pay, and adds commuting hours to the hours, so both sides of the fraction reflect what the job actually takes and actually leaves. The hours of work figure divides the price by that effective rate, and the working-days figure converts it at 7.6 hours to the day.
| Term | Meaning |
|---|---|
| Nominal hourly rate | Take-home pay divided by paid hours, the figure most people would quote. |
| Effective hourly rate | Pay after the costs of working, divided by hours including the commute. What an hour given to work actually leaves you with. |
| Cost of working | Money spent because you have the job: transport, parking, lunches bought out, work clothing. |
| Working day | Taken as 7.6 hours here, which is a standard full-time day on a 38-hour week. |
The inputs explained
| Field | What to enter |
|---|---|
| Price of the item ($) | The price of the thing you are considering. |
| Take-home pay per week ($) | Take-home pay per week, after tax. Using gross pay would overstate the rate considerably. |
| Hours worked per week | Paid hours worked per week. |
| Commuting hours per week | Hours spent commuting per week, both directions. Set it to zero if you work from home. |
| Weekly cost of working (transport, lunch) ($) | What working costs you per week. Count only what you would not spend otherwise. |
When to use it
Putting a large purchase in context
A price in hours is a different kind of information from a price in dollars. Neither is more correct, and seeing both is usually more useful than seeing either alone.
Comparing two jobs honestly
A job paying more but with a longer commute and higher costs can leave you with a lower effective rate. Running each one gives a comparison that the headline salaries do not.
Working out what a recurring cost adds up to
A subscription or a habit priced in hours per year tends to land differently from the same figure in dollars per month, because it is measured in something genuinely finite.
Worked examples
Every figure in the tables below is produced by this page’s own calculator at build time, so the numbers and the tool always agree. Select any row to load that scenario.
What do different purchases cost in hours?
A range of prices, from a small purchase to a large one, against the same effective rate.
| Price | Hours of work | Working days (7.6 h) | Share of a week’s pay |
|---|---|---|---|
| $50 | 1.7 hours | 0.2 | 3.57% |
| $200 | 6.7 hours | 0.9 | 14.3% |
| $1,800 | 60.5 hours | 8.0 | 128.6% |
| $5,000 | 168.0 hours | 22.1 | 357.1% |
Questions
Should I use gross or take-home pay?
Take-home. Tax is not money you can spend, so including it inflates the hourly rate and makes everything look cheaper in hours than it is. If you only know the gross figure, work out the net first rather than approximating.
Why include commuting time?
Because it is time the job costs you that you are not paid for. An hour each way on a five-day week is ten unpaid hours, which is over a quarter of a 38-hour week. Whether you count it is a judgement about how you think of that time, and the calculator lets you set it to zero if you would rather not.
What counts as a cost of working?
Anything you spend because of the job and would not spend otherwise: fares, fuel and parking for the commute, lunches bought rather than brought, clothing you would not otherwise buy, and paid care arranged around working hours. Ordinary living costs do not belong here.
Does a high hours figure mean I should not buy it?
No. It is one way of looking at a price, not a verdict on it. Plenty of things are worth many hours of work, and the calculation has nothing to say about which. All it does is express the cost in a unit that is harder to be vague about.
For comparing two products by price per unit, see the unit price comparison calculator. For the same idea applied to time spent in meetings, see the cost of a meeting calculator.