1. What is Net Hourly Wage?

Net hourly wage is the amount you actually take home per hour after deducting income tax and National Insurance contributions. For self-employed individuals in the UK, this calculation helps understand true earnings.

2. How Does the Calculator Work?

The calculator uses the following equation:

Where:

• Gross Hourly Wage — Your earnings before any deductions (GBP/hour)
• Income Tax — The amount deducted for income tax (GBP/hour)
• National Insurance — Class 2 or 4 contributions (GBP/hour)

Explanation: This calculation helps self-employed individuals understand their actual take-home pay per hour worked.

3. Importance of Calculating Net Wage

Details: Knowing your net hourly wage helps with financial planning, setting rates for clients, and understanding your true earnings after tax obligations.

4. Using the Calculator

Tips: Enter your gross hourly wage in GBP, estimated income tax per hour, and National Insurance contributions. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: How do I estimate my income tax per hour?
A: Divide your estimated annual tax bill by your total working hours per year to get an hourly rate.

Q2: What's the difference between Class 2 and Class 4 NI?
A: Class 2 is a flat weekly rate if profits are above £6,725. Class 4 is profit-based (9% on profits between £12,570-£50,270, 2% above).

Q3: Should I include VAT in my gross wage?
A: No, VAT is separate and should not be included in your gross wage calculation.

Q4: How often should I recalculate this?
A: Recalculate whenever your income, tax rates, or working hours change significantly.

Q5: Are there other deductions I should consider?
A: You may also want to account for business expenses, pension contributions, and student loan repayments if applicable.