Day rate, annualized
How to turn a daily rate into a salary
A day rate looks generous until you annualize it — and remember that contractors don't get paid for holidays, sick days or gaps between contracts. The formula is simple: day rate × days per week × working weeks per year. The art is choosing a realistic number of working weeks, because nobody bills 52.
Worked example: a $400 day rate
At $400 a day, 5 days a week, 48 weeks a year, gross pay is $400 × 5 × 48 = $96,000 a year. That's $8,000 a month gross, or $50 an hour on an 8-hour day. After federal tax and FICA, a single filer nets roughly $76,000 — but a true contractor would also owe self-employment tax instead of employee FICA, which this employee-side estimate doesn't add.
| Day rate | × 5 days × 48 weeks | Annual salary |
|---|---|---|
| $250 | 1,200 days/yr | $60,000 |
| $400 | 240 days/yr | $96,000 |
| $600 | 240 days/yr | $144,000 |
| $800 | 240 days/yr | $192,000 |
Assumes 5 working days per week and 48 paid weeks per year. Adjust the inputs for your real schedule.
If you're truly self-employed
This tool estimates the employee-equivalent salary. If you invoice as a contractor, you'll owe self-employment tax rather than employee FICA — see the self-employment tax calculator and the 1099 vs W-2 calculator for the real net figure.
Questions
Daily rate to salary FAQ
How do I convert a day rate to an annual salary?
Multiply your day rate by the number of days you work per week and the number of working weeks per year. For example, $400 a day × 5 days × 48 weeks = $96,000 a year. Use realistic working weeks, since contractors are not paid for time off.
What annual salary is a $400 day rate?
At 5 days a week and 48 working weeks, a $400 day rate equals $96,000 a year gross, about $8,000 a month, or $50 an hour on an 8-hour day. After federal tax and FICA, a single filer nets roughly $76,000.
How many working weeks should I use?
Most people use 48 weeks to allow for about four weeks of unpaid time off. Contractors often use 44 to 46 weeks to account for gaps between contracts, holidays and admin days. Fewer working weeks gives a more conservative, realistic salary.
Does this include self-employment tax?
No. This calculator gives an employee-side estimate using regular FICA. If you invoice as an independent contractor, you owe the full 15.3% self-employment tax instead, so use the self-employment tax calculator for your true net pay.
- Sources: IRS Rev. Proc. 2025-32 (2026 brackets & standard deduction) · SSA 2026 OASDI wage base ($184,500) · IRS Topic No. 751.
- 🔄 Last updated June 21, 2026 · Tax year 2026
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