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Paid Before Lunch

Freelance day rate calculator

The day and hourly rate you need to match a salary, once you pay your own costs and only get paid for the days you bill.

$

Your income before income tax, as if you were employed.

%

Pension, health cover and the like, as % of salary. 10% is a fair start.

$

Software, equipment, insurance, accountant, phone, co-working.

days
hrs
days
days
days
%

Admin, finding clients, learning. 20 to 30% is typical.

%

Extra on top, because work rarely arrives evenly.

How the day rate is worked out

  1. What you need a year. The salary you want to match, plus what an employer would add (pension, health cover), plus your business costs, plus a buffer for quiet months.
  2. Days you can bill. Working days in a year, minus holidays, public holidays and sick days, minus the share of time you can't bill.
  3. Day rate = what you need ÷ days you can bill. The hourly rate is the day rate ÷ hours in your day.

A worked example

Sam left a job paying 50,000 a year. Their employer paid about 10% on top into a pension. As a freelancer they expect 4,000 a year of costs and want a 10% buffer. That's (50,000 + 5,000 + 4,000) × 1.1 = 64,900 a year.

Working 5 days a week, with 25 days' holiday, 8 public holidays and 5 sick days, leaves 222 working days. A fifth goes on admin and finding work, leaving about 178 billable days. 64,900 ÷ 178 = about 365 a day, or 46 an hour for an 8-hour day.

Then check the market

Your break-even rate is the floor, not the price. Look at what others with your skills charge, what the client gains from the work, and how urgent it is. If you're paid through a platform or by card, add the fees: our payment fee calculator shows what to charge to receive your rate. When the work is agreed, send a quote, then an invoice.

Questions people ask

›Why isn't my day rate just my salary divided by 260?

Because you won't be paid for 260 days. Take off holidays, public holidays and sick days, and then the time spent on admin, sales and learning, and most freelancers bill 150 to 190 days a year. You also pay for things an employer would cover: pension, equipment, software and insurance.

›Does the day rate include tax?

The salary you enter is before income tax, so the day rate is too: you pay income tax on your profit, just as an employee pays it on their salary. If you're registered for VAT or GST, add it on top of the day rate on your invoices.

›How much time can't I bill?

20 to 30% is typical: finding clients, writing proposals, invoicing, bookkeeping and keeping your skills up. New freelancers often spend more while they build a client base.

›Should I charge by the day or by the hour?

Day rates are common for contractors and consultants, and they stop clients counting minutes. Hourly suits small or unpredictable jobs. For well-defined projects, a fixed price based on your day rate often earns more.