Your Day Rate
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Day Rate Calculator for Freelancers & Contractors
Work out exactly what to charge per day. Enter your target income, costs, and working pattern — the calculator builds your minimum day rate, adjusted for tax, holidays, and non-billable time.
Tip! — The day rate shown is your minimum floor. Add a profit margin on top so you have room to negotiate and still hit your income target.
| Target Annual Take-Home (£) | |
| Annual Business Costs (£) | |
| Working Weeks per Year | |
| Billable Days per Week | |
| Non-Billable Days (admin, pitching) | |
| Tax Band | |
| Profit Margin (%) |
Day Rate Breakdown
| Item | Amount |
|---|---|
| Run calculation to see your breakdown | |
GUIDE
Day Rate & Freelance Pricing Guide
How to set a rate that covers your costs, competes in your market, and actually pays you what you're worth — including IR35, VAT, and negotiating tactics.
Read Guide →How to Use the Day Rate Calculator
Step-by-Step
- Enter your target take-home income — the net amount you want to land in your pocket after tax and NI. Be specific and honest; this drives every other number.
- Add your annual business costs — accountant fees, software subscriptions, insurance, equipment, travel. Don't underestimate this; uncovered costs silently eat your income.
- Set your working weeks and billable days — 46 weeks is a practical default (52 weeks minus 4 weeks holiday and 2 weeks for illness or admin). Adjust to match your situation.
- Enter non-billable days — every freelancer spends time on proposals, admin, CPD, and marketing that cannot be invoiced. The calculator deducts these from your available days to give a realistic billable count.
- Select your tax band — basic rate (up to ~£50,270 gross) or higher rate (above). This estimates the Income Tax and Class 4 NI your gross income will attract.
- Add a profit margin — this lifts your floor rate so you have room to negotiate without falling below your income target. 10–20% is a sensible starting point.
- Click Calculate to see your minimum day rate, recommended rate with margin, and a full breakdown of billable days, gross revenue needed, and tax estimate.
What Your Day Rate Actually Needs to Cover
Most freelancers undercharge — not because they lack confidence, but because they calculate from the wrong starting point. Setting a day rate by looking at what competitors charge, or dividing a desired salary by 260 days, both miss the same fundamental problem: you are not an employee.
The Cost of Being Your Own Employer
An employee earning £50,000 costs their employer considerably more than £50,000. On top of salary, the employer pays employer National Insurance (13.8% above the secondary threshold), pension contributions, holiday pay, sick pay, and often equipment and training. As a freelancer, every one of those costs falls on you — and your day rate must absorb them.
Beyond tax and NI, there are the hidden costs that salaried employees never see: professional indemnity insurance, accountancy fees, software licences, IR35 review costs, and the time spent on proposals and pitches that never convert. A lean freelance business still typically spends £2,000–£6,000 per year on overheads before earning a penny of take-home pay.
Billable Days: The Number That Changes Everything
The most common miscalculation is assuming you can bill for all your working days. In practice, UK freelancers work around 260 days per year (52 weeks × 5 days). Subtract 28 days of statutory holiday equivalent, 5–10 days for sickness, and 15–25 days of non-billable time — proposals, admin, training, client onboarding — and your realistic billable count sits closer to 200–220 days.
That gap matters enormously. A freelancer targeting £80,000 gross revenue who bills 260 days needs £308/day. The same freelancer with a realistic 210 billable days needs £381/day — a 24% difference. Getting the billable day count right is more important than agonising over the tax calculation.
Why You Need a Profit Margin on Top
Your minimum day rate is a floor, not a price. If you quote exactly your floor rate, any discount, any slow month, or any unexpected cost wipes out your income target. Adding a profit margin of 10–20% creates a buffer: you can negotiate, absorb a quiet quarter, or fund business investment without immediately dropping below your income requirement.
Clients do not see your cost breakdown. What they see is the value you deliver. If your minimum day rate is genuinely fair given your skills and market rates, quoting 15% above it is not greed — it's good business practice.
Day Rate vs Equivalent Salary
A rough rule of thumb used across the UK contracting market: multiply your day rate by 200 to get a comparable permanent salary. So £400/day ≈ £80,000 salary equivalent. The multiplier reflects holidays, employer NI, and benefits that a salaried employee receives and a contractor must fund themselves. Use this as a sanity check when comparing contract roles against permanent offers — and use our UK VAT Calculator alongside this tool if you are VAT-registered.
Frequently Asked Questions
How do I calculate my day rate as a freelancer?
Start with your desired annual take-home income. Add your business costs and a tax estimate to find the gross revenue you need. Divide that by your realistic number of billable days. Most UK freelancers work between 200 and 230 billable days per year after accounting for holidays, sick days, and non-billable admin time.
What should I charge per day as a UK freelancer?
It depends on your target income, expenses, sector, and experience level. A freelancer targeting £50,000 take-home with £3,000 in costs and 210 billable days typically needs a minimum day rate of around £380–£420 before adding a profit margin. Specialist sectors such as IT, legal, and finance regularly command £450–£900 per day.
How many billable days can a freelancer work per year?
A practical benchmark is 200–220 days. Start from 260 working days (52 weeks × 5 days), then subtract 28 days of holiday equivalent, around 7 days for sickness or personal days, and at least 15–20 days for non-billable activities like admin, business development, and proposals. The calculator defaults to 46 working weeks and 20 non-billable days, giving around 210 billable days.
Should my day rate include or exclude VAT?
Quote your day rate exclusive of VAT. If you are VAT-registered, you add 20% on top when invoicing. Your rate should be set on what you need to receive — VAT is collected on HMRC's behalf and passed straight through. Use our UK VAT Calculator to check the gross invoice total for any day rate.
Does my day rate need to cover tax and National Insurance?
Yes. As a freelancer you are responsible for your own Income Tax and Class 4 National Insurance. There is no employer paying NI contributions on your behalf. Your day rate must be high enough that, after paying tax, NI, and your business costs, you retain your target take-home amount. This calculator includes a simplified estimate of your combined tax liability to help you size the gross revenue you need.
How is a freelance day rate different from an equivalent salary?
The standard rule of thumb in the UK contracting market is to multiply your day rate by 200 to find a rough salary equivalent — so £400/day equates to around £80,000 salary. The multiplier accounts for the employer National Insurance, pension contributions, paid holiday, and sick pay that an employee receives and a freelancer must self-fund. When comparing a contract rate against a permanent offer, also factor in the true cost of employment benefits to make a fair like-for-like comparison.