How to use this tool
Enter your desired annual income, monthly business expenses, tax percentage, billable hours per week, vacation weeks and profit margin. Your rates update instantly with every change โ no submit button needed.
Once you have your baseline rate, compare it against the wider market. Your calculated rate protects your income and business costs โ the market tells you how to position and package it.
Pricing tips
- โNever base your rate only on employee salary maths.
- โInclude admin, sales, marketing and quiet weeks in planning.
- โFor fixed projects, add a scope buffer and define revision limits.
- โReview prices every few months as demand and expenses change.
- โA higher rate with fewer clients is often healthier than a low rate with many.
Key pricing formula
รท (1 โ tax rate)
ร (1 + profit margin)
รท Annual billable hours
= Your hourly rate
Related Tools
How to Calculate Your Freelance Day Rate
Your day rate is your annual income requirement divided by your total billable days per year. The mistake most contractors make is using 260 days (5 days ร 52 weeks) as the divisor. In reality, billable days are closer to 180โ220 once you subtract vacation, bank holidays, proposal time and sick days.
| Working Pattern | Estimated Billable Days/Year |
|---|---|
| 4 days/week, 5 weeks holiday | ~180 days |
| 5 days/week, 4 weeks holiday | ~220 days |
| Contract-only, minimal gaps | ~200โ230 days |
Day rate vs hourly rate โ which should you use?
Day rates work best for on-site work, workshops, short contracts and situations where scope is unclear. Hourly billing suits remote support, ongoing consulting, or tasks with variable time requirements. For most UK contractors working inside or outside IR35, a day rate is the standard quoting format.