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MasterMath

Value of Your Time

What an hour of your time is worth given what you earn. It settles when paying for something beats doing it yourself.

Your hour is worth

—

Your hour is worth—
Counting the commute—
Per minute—
Per working day—
Hours worked a year—
Hours committed a year—

How this was worked out

    The formula

    value per hour = annual income ÷ hours worked a year

    Where it comes from

    The calculation runs on hours actually worked, with holidays taken out. The second figure adds commuting time, which is not paid but is given to the job: that is why the real hour is always worth less than the nominal one.

    How to work it out by hand

    1. Subtract your holiday weeks from the 52 in the year
    2. Multiply by your weekly hours
    3. Divide your annual income by that total

    What is worth knowing

    The practical use of this number is deciding what to hand over. If your hour is worth 16 and cleaning the house takes three hours, paying 40 for a cleaner comes out ahead in pure time terms. The calculation has an obvious limit: it only works if the freed-up hours genuinely turn into income or into rest you value, not if they simply fill with something else.

    Frequently asked questions

    How do I work out what my hour is worth?

    Divide your net annual income by the hours you work in a year, holidays excluded.

    Why count commuting?

    Because it is time given to the job even though it is not paid. Five hours of commuting a week cuts the real value of your hour by over 10 %.

    Is it any use for deciding whether to delegate?

    As a guide, yes, as long as the time freed up turns into something you genuinely value.