Includes Bank Holidays, annual leave, and sick days.
Hours you actually charge clients (exclude admin time).
Percentage markup for savings, growth, or tax buffer.
Minimum Hourly Rate
£0.00
Daily Rate (approx)
£0.00
Monthly Target
£0.00
Based on working 0 weeks per year.
How to Calculate Your Freelance Hourly Rate in the UK
Setting the right hourly rate is one of the most challenging aspects of becoming a freelancer or contractor in the UK. If you charge too little, you risk burnout and financial instability. If you charge too much without justification, you may price yourself out of the market. This calculator uses a "reverse engineering" method to help you determine a rate that covers your lifestyle, business costs, and future savings.
Understanding the Formula
Unlike a permanent employee salary, your freelance rate must cover much more than just your time. When calculating your rate, you must account for:
Unbillable Time: You won't be paid for time spent on marketing, invoicing, admin, or finding new clients. A standard full-time week is 37.5 hours, but freelancers often only bill 20-30 hours.
Overheads: You are responsible for your own hardware (laptops, cameras), software subscriptions (Adobe, Office 365, Xero), and insurance (Professional Indemnity, Public Liability).
Time Off: As a self-employed individual in the UK, you do not get paid holiday or sick leave. You must factor typically 4-6 weeks of non-earning time into your annual calculation to ensure you can afford to take breaks.
UK Tax Considerations
Remember that the "Desired Annual Income" you input above is your Gross revenue target. From this amount, you will need to deduct:
Income Tax: Based on the current HMRC bands (Basic, Higher, or Additional rates).
National Insurance: Class 2 and Class 4 contributions for the self-employed.
Pension Contributions: You must fund your own private pension pot.
It is generally recommended to add a "Buffer" or "Profit Margin" of at least 10-20% on top of your base costs to account for lean months or unexpected tax bills.
Example Calculation
Let's say you want a gross salary of £40,000 per year. Your business costs are £2,000. You plan to take 6 weeks off (holidays + bank holidays).
Your total target revenue is £42,000. You have 46 working weeks. If you bill 30 hours a week, that is 1,380 billable hours per year.
£42,000 ÷ 1,380 hours = £30.43 per hour.
This is your "break-even" rate. To grow your business, you should add a margin, bringing your charge-out rate closer to £35-£40 per hour.
function calculateUKRate() {
// 1. Get input values
var desiredSalary = parseFloat(document.getElementById('uk_desired_salary').value);
var annualCosts = parseFloat(document.getElementById('uk_annual_costs').value);
var weeksOff = parseFloat(document.getElementById('uk_weeks_off').value);
var billableHoursPerWeek = parseFloat(document.getElementById('uk_billable_hours').value);
var profitMargin = parseFloat(document.getElementById('uk_profit_margin').value);
// 2. Validation
if (isNaN(desiredSalary) || desiredSalary <= 0) {
alert("Please enter a valid desired annual salary.");
return;
}
// Default 0 for costs if empty
if (isNaN(annualCosts)) { annualCosts = 0; }
if (isNaN(weeksOff) || weeksOff 52) {
alert("Please enter a valid number of weeks off (0-52).");
return;
}
if (isNaN(billableHoursPerWeek) || billableHoursPerWeek 168) {
alert("Please enter a valid number of billable hours per week.");
return;
}
if (isNaN(profitMargin)) { profitMargin = 0; }
// 3. Calculation Logic
// Total Revenue Required
var totalTargetRevenue = desiredSalary + annualCosts;
// Working Weeks
var workingWeeks = 52 – weeksOff;
// Total Billable Hours Per Year
var totalBillableHours = workingWeeks * billableHoursPerWeek;
// Base Hourly Rate (Break even)
var baseHourlyRate = totalTargetRevenue / totalBillableHours;
// Apply Profit Margin
var marginMultiplier = 1 + (profitMargin / 100);
var finalHourlyRate = baseHourlyRate * marginMultiplier;
// Calculate derived metrics
// Assuming a standard "day" is roughly the billable hours / 5,
// OR simply Hourly Rate * (Billable Hours / 5) if they work 5 days.
// A safer bet for Daily Rate in freelancing is usually Hourly Rate * 7.5 or 8,
// BUT since we defined billable hours per week, let's derive the daily average based on a 5-day week logic
// or simply (BillableHoursPerWeek / 5) * HourlyRate.
var dailyBillableHours = billableHoursPerWeek / 5;
var dailyRate = finalHourlyRate * dailyBillableHours;
// Monthly Target (Average across 12 months)
// Total Yearly Revenue needed (including margin) / 12
var totalYearlyRevenueWithMargin = totalTargetRevenue * marginMultiplier;
var monthlyTarget = totalYearlyRevenueWithMargin / 12;
// 4. Update Display
document.getElementById('result_hourly').innerHTML = "£" + finalHourlyRate.toFixed(2);
document.getElementById('result_daily').innerHTML = "£" + dailyRate.toFixed(2);
document.getElementById('result_monthly').innerHTML = "£" + monthlyTarget.toFixed(2);
document.getElementById('display_working_weeks').innerText = workingWeeks;
// Show results div
document.getElementById('uk_results_area').style.display = "block";
}