UK Freelance Day Rate Calculator
How to Calculate Your Freelance Rate in the UK
Setting the correct daily or hourly rate is one of the most critical challenges for UK freelancers. Unlike permanent employment, where your salary is guaranteed regardless of sick days or holidays, a freelance rate must encompass your desired take-home pay, business expenses, taxes, and non-billable time. This Freelance Rate Calculator UK helps you reverse-engineer your rate based on your financial goals.
1. The "Billable Days" Reality Check
Many new freelancers make the mistake of dividing their desired salary by 260 (the standard number of working days in a year: 52 weeks × 5 days). This calculation is dangerous because it assumes you will work every single weekday without illness, holidays, or administrative downtime.
In the UK, a realistic calculation starts by deducting:
- Bank Holidays: typically 8 days per year.
- Personal Holidays: typically 20–25 days.
- Sick Leave Buffer: 5–10 days is prudent.
This immediately reduces your available working days from 260 to roughly 220.
2. Accounting for Non-Billable Work
As a freelancer, you run a business. You cannot bill clients for the time spent doing your tax return (Self Assessment), marketing your services, updating your website, or networking. This is "non-billable time."
A standard rule of thumb for UK freelancers is that 20% to 25% of your time will be non-billable. Our calculator adjusts for this, ensuring your billable hours generate enough revenue to cover the time you spend managing the business.
3. Business Expenses and Overheads
Your rate must cover your overheads. If you don't factor these in, they come directly out of your pocket. Common UK freelance expenses include:
- Accountancy fees (£500–£1,500/year).
- Professional Indemnity & Public Liability Insurance.
- Software subscriptions (Adobe CC, Microsoft 365, Xero/QuickBooks).
- Hardware costs (Laptops, phones, broadband).
- Co-working space rent or home office costs.
4. The Formula Used in This Calculator
To determine your day rate, we use the following logic adapted for the UK market:
(Desired Annual Income + Annual Business Costs) ÷ Total Billable Days = Required Day Rate
Where Total Billable Days is calculated as:
(Total Weekdays [260] – Holidays – Sick Days) × (100% – Non-Billable %)
5. Gross vs Net Income
Please note that the "Target Annual Income" input in this calculator represents your Gross Revenue goal (turnover before tax). Remember that as a sole trader or Limited Company director in the UK, you will need to set aside money for Income Tax and National Insurance from this amount. A safe buffer is usually to save 25–30% of your earnings for HMRC.