Freelance Rate Calculator
Work out the day rate and hourly rate you need to charge to reach the income you want.
What this calculates
A freelance rate is not a salary divided by the days in a year, and that is why freelance rates look so high next to an employee's wage. Two things sit in between. The first is unbillable time. You do not invoice for holidays, public holidays or the days you are ill, and you do not invoice for the hours spent chasing work, writing quotes, sending invoices, doing admin and keeping your skills current. Out of a full working year, most freelancers bill somewhere between 60% and 75% of their time. Everything else still has to be paid for by the days you do bill. The second is business costs. Software, insurance, an accountant, equipment and a place to work all come out of what you invoice, before you have earned a penny for yourself. So the money the business must bring in is your target income plus those costs. This calculator takes the year apart the same way: it works out how many days you really work, how many of those you actually bill, adds your costs to the income you want, and divides. The number it gives is the rate that makes your year add up — not an ambitious one.
Formula
working days = 52 × days per week − holiday − public holidays − sick days billable days = working days × billable share ÷ 100 revenue needed = income you want + business costs day rate = revenue needed ÷ billable days hourly rate = day rate ÷ 8
Example
You want to take home 60,000 a year and the business costs 5,000 to run, so it must bring in 65,000. Working five days a week gives 260 days; take off 25 days holiday, 10 public holidays and 5 sick days and 220 working days are left. If you bill 70% of that time, 154 days are actually invoiced. 65,000 ÷ 154 is a day rate of 422.08, or 52.76 an hour over an eight-hour day. A salary of 60,000 spread over the same 220 working days is about 273 a day — the gap between 273 and 422 is the unbilled time and the costs you carry yourself, not extra profit.
Frequently asked questions
Why is my rate so much higher than an employee's hourly wage?
Because an employee is paid for every working day and you are only paid for the days you invoice. Their holiday, sick days, public holidays, admin time, training, pension, software and desk are all paid by someone else. Yours are paid by the days you bill, so those days have to carry the cost of the days you do not. A rate that looks double an employee's wage usually leaves you with about the same money.
What billable share should I use?
60% to 75% is normal for most freelancers. Below 60% usually means too much time on finding work or unpaid revisions; above 80% is rare and hard to keep up for a whole year. If you are just starting, use a lower figure — your first year is mostly spent finding clients.
Is the income figure before or after tax?
Before tax. This tool works out what the business needs to bring in; income tax, social contributions and any VAT are separate and depend on where you live. If you want a specific amount after tax, raise the income figure until the take-home is right for your country.
Should I really charge for sick days I might not take?
Yes. You are not charging for them — you are spreading their cost across the days you do work, exactly as an employer does. If you stay well, that money simply becomes a buffer for the year you are not so lucky.
What if I charge by the hour instead of the day?
Use the hourly figure, which assumes an eight-hour billable day. If your day is shorter, the hourly rate has to be higher to reach the same year, so change the working days or the billable share to match how you really work.