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 Much Tax Do UK Freelancers Pay?
UK freelancers pay Income Tax plus Class 4 National Insurance on their profits above the personal allowance (ยฃ12,570 for 2025/26). The combined effective rate depends on your profit level โ most freelancers earning ยฃ30,000โยฃ60,000 have an effective combined rate of 25โ35%. Use the calculator above to estimate your specific liability.
| Annual Profit | Income Tax | Class 4 NI | Total Rate (approx) |
|---|---|---|---|
| ยฃ15,000 | ยฃ486 | ~ยฃ216 | ~5% |
| ยฃ30,000 | ยฃ3,486 | ~ยฃ1,566 | ~17% |
| ยฃ50,000 | ยฃ7,486 | ~ยฃ3,366 | ~22% |
| ยฃ80,000 | ยฃ19,432 | ~ยฃ3,966 | ~29% |
Figures approximate. Source: HMRC 2025/26 rates. Does not include Class 2 NI (ยฃ3.45/week if profits above ยฃ12,570).
How much should I set aside for tax?
As a rule of thumb: set aside 25โ30% of every invoice if you earn under ยฃ50,000/year. Set aside 35โ45% if you earn over ยฃ50,000. Transfer it to a separate savings account immediately โ never keep it in your current account where it blends with available cash.