Find out what to charge as a freelancer or contractor — accounting for tax, holidays, and non-billable time.
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Start with your target take-home, gross it up for tax, add expenses, then divide by your billable days. Billable days = working days − holidays − sick/admin days, × your billable utilisation rate. This calculator does all of that automatically.
UK day rates vary hugely by sector: software developers £400–£800/day, digital marketers £250–£500/day, UX designers £350–£650/day, copywriters £200–£450/day, project managers £350–£600/day. Senior and specialised contractors command premium rates.
No — as a freelancer you pay your own tax, NI, pension, and have no holiday or sick pay. Your day rate should typically be 1.5–2× a comparable permanent salary equivalent to break even. Use this calculator to find your personal break-even.
Common deductible expenses: home office costs, equipment, software subscriptions, professional development, travel, accountant fees, professional indemnity insurance, and marketing costs. Keep receipts for everything.
UK self-employed: set aside ~25–30% of invoices to cover income tax and Class 4 NI. US self-employed: set aside ~25–30% for federal/state income tax and 15.3% self-employment tax. Many freelancers run a separate tax savings account.
The Freelancer Day Rate Calculator works out the minimum daily or hourly rate you need to charge to achieve your target take-home income after accounting for tax, self-employment costs, holidays, sick days, and non-billable time. Enter your target annual salary (or monthly income), your country or tax situation, the number of weeks holiday you plan to take, how many sick days to allow for, and an estimate of the proportion of your working time that is billable (versus time spent on admin, marketing, and business development). The calculator translates all of this into a floor daily rate — charge below it and you will earn less than your target after expenses and tax.
Freelancers consistently underprice themselves by calculating their rate from an equivalent employee salary without adjusting for the differences in working days and tax structure. As a self-employed worker you pay both the employer and employee portions of National Insurance (in the UK) or self-employment tax (in the US, equivalent to 15.3% of net earnings). You also forego paid holidays, sick pay, pension contributions, and employer benefits that a salaried employee receives. To match the total package of a £50,000 salaried employee in the UK, a freelancer typically needs to charge rates equivalent to a £65,000–£75,000 gross income, factoring in all the uncovered benefits and self-employment taxes.
Beyond the floor rate, market positioning matters enormously. Your minimum viable rate sets the absolute floor, but experienced freelancers in specialist fields can — and should — charge significantly more. The market rate for your skill, seniority, and specialism is the ceiling of what clients will accept; your floor rate is the minimum that keeps your business viable. The best day rate sits comfortably between the two. As your reputation and portfolio grow, raising rates proactively is far easier than trying to catch up after years of undercharging. Use this calculator to establish your floor rate, then research market rates through job boards, freelance surveys, and industry peers to determine where you can position yourself above it.
Not every working day generates client income. Admin, proposal writing, networking, CPD, and marketing all take time but cannot be invoiced. A realistic billable utilisation rate for most freelancers is 60–80% of total working days. The calculator divides your required annual income by billable days only, automatically inflating your rate to cover the days you are working but not billing.
Day rates are common in consulting, contracting (especially IT and finance), and creative industries in the UK. Hourly rates are more common for trades, coaching, legal, and US-based freelancing. Day rates create more predictable income for both you and the client and reduce the incentive to work slowly. If you charge hourly, your day rate equivalent is typically 7–8 hours per day.
In the UK, saving 25–30% of your gross income typically covers income tax and Class 4 National Insurance for most freelancers. In the US, set aside 25–35% to cover federal/state income tax and the 15.3% self-employment tax. Paying quarterly estimated tax payments (US) or setting up a payment on account (UK) avoids large lump-sum bills at the end of the year.
Yes. If you are working inside IR35 in the UK, your income is treated as deemed employment income. Enter a higher target gross income to account for the additional tax liability — a common rule of thumb is that inside-IR35 rates need to be 15–25% higher than outside-IR35 to achieve the same take-home, though the exact figure depends on your income level and the fee-payer's deductions.
Review your rates at least annually. As a minimum, increase by the rate of inflation to maintain real purchasing power. Beyond inflation, rate increases are justified by growing experience, a stronger portfolio, specialisation in high-demand skills, or simply better understanding of your market value. Many freelancers find that raising rates actually improves client quality, as premium clients tend to associate higher rates with higher competence.