How do you get an hourly rate from a monthly salary?
Divide the monthly salary by that month's normal working hours, not by a fixed number. A salary of 1,200 euro in a month with 168 working hours gives 7.14 an hour, while the same salary in a 160-hour month gives 7.50.
Why does the number of working hours vary by month?
Because months hold different numbers of working days and public holidays fall unevenly. On a forty-hour week a month runs from 152 to 184 hours. That is why an hourly rate worked out from a single average is wrong in particular months.
How is overtime pay calculated?
The Labour Law requires a supplement of at least one hundred percent of the set hourly rate, so an overtime hour pays double. That is why a correct hourly rate matters even on a monthly salary: it is what each overtime hour is priced from.
Is the hourly rate based on gross or net pay?
Contracts and time records always use the gross rate, because overtime, supplements and holiday pay are all calculated from it. A net hourly rate is useful only for personal comparison, and it differs from person to person with their tax reliefs.