Freelance Day Rate Calculator

Setting a freelance day rate is one of the trickiest parts of going self-employed. Charge too little and you risk working long hours for less than a salaried equivalent. This calculator works backwards from the income you want to earn, factoring in expenses, non-billable time and a buffer for quieter periods, to suggest a day rate that actually adds up.

How to use the freelance day rate calculator

Enter the annual income you want to earn before tax, your yearly business expenses, and how many weeks and days a week you plan to work. Add an estimate for non-billable time, such as admin and marketing, and a buffer percentage to cover gaps between contracts. The calculator returns a suggested day rate, an hourly rate, and the total revenue you would need to bill across the year.

How the calculation works

The calculator first adds your desired income and annual expenses together to get a total revenue target. It then works out your billable days by taking your total working days and removing the percentage you have marked as non-billable. Dividing the revenue target by billable days gives a base day rate, which is then increased by your buffer percentage to build in a cushion for holidays, illness and quiet periods between contracts.

Worked example

Say you want to earn £45,000 a year, with £5,000 in annual business expenses, working 46 weeks at 5 days a week, with 20% non-billable time and a 10% buffer. Total working days come to 230, and billable days after removing non-billable time come to 184. Your revenue target of £50,000 divided by 184 billable days gives a base rate of around £271.74, which becomes roughly £298.91 a day after the 10% buffer, or about £39.86 an hour over a 7.5 hour day.

Reviewing your rate over time

A day rate is not something to set once and forget. As your expenses change, your experience grows, or market demand for your skills shifts, it is worth revisiting your calculation every year or when you take on a new type of work. Many freelancers also charge different rates for different types of projects, using this calculation as a baseline rather than a fixed figure for every client.

Common mistakes people make

A common mistake is basing a day rate purely on a target salary divided by working days in the year, without allowing for non-billable time, expenses or gaps between contracts, which quickly leaves you short. Another mistake is forgetting that a day rate needs to cover Income Tax, National Insurance and pension contributions that an employer would otherwise handle. It also helps to review your rate regularly rather than leaving it unchanged for years while your costs rise.

Related calculators

Once you know your day rate, our self-employed tax calculator can help you estimate what you might owe HMRC. Comparing salary and hourly figures is easier with our salary to hourly calculator, and our break-even calculator is useful if you are weighing up business costs more broadly. For more context on setting rates, see our guide to working out your freelancer hourly rate.