Please enter valid positive numbers for all fields.
Recommended Day Rate$0.00
Hourly Rate Equivalent$0.00
Total Revenue Required$0.00
Total Billable Days per Year0
function calculateDayRate() {
var targetIncome = parseFloat(document.getElementById('targetIncome').value);
var annualOverhead = parseFloat(document.getElementById('annualOverhead').value);
var weeksOff = parseFloat(document.getElementById('weeksOff').value);
var daysPerWeek = parseFloat(document.getElementById('daysPerWeek').value);
var billablePercent = parseFloat(document.getElementById('billablePercent').value);
var hoursPerDay = parseFloat(document.getElementById('hoursPerDay').value);
var errorMsg = document.getElementById('errorMsg');
var resultsSection = document.getElementById('resultsSection');
// Validation
if (isNaN(targetIncome) || isNaN(annualOverhead) || isNaN(weeksOff) ||
isNaN(daysPerWeek) || isNaN(billablePercent) || isNaN(hoursPerDay) ||
targetIncome < 0 || daysPerWeek <= 0) {
errorMsg.style.display = 'block';
resultsSection.style.display = 'none';
return;
}
errorMsg.style.display = 'none';
// 1. Calculate Total Revenue Required
var totalRevenue = targetIncome + annualOverhead;
// 2. Calculate Total Working Weeks
var totalWeeksInYear = 52;
var workingWeeks = totalWeeksInYear – weeksOff;
// 3. Calculate Potential Working Days
var potentialDays = workingWeeks * daysPerWeek;
// 4. Calculate Actual Billable Days (accounting for admin/sales/unbillable time)
var billableEfficiencyDecimal = billablePercent / 100;
var actualBillableDays = potentialDays * billableEfficiencyDecimal;
// Handle edge case where billable days is 0 to avoid Infinity
if (actualBillableDays <= 0) {
errorMsg.innerText = "Billable days resulted in zero. Increase work days or efficiency.";
errorMsg.style.display = 'block';
resultsSection.style.display = 'none';
return;
}
// 5. Calculate Rates
var dayRate = totalRevenue / actualBillableDays;
var hourlyRate = dayRate / hoursPerDay;
// 6. Display Results
document.getElementById('finalDayRate').innerText = '$' + dayRate.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('finalHourlyRate').innerText = '$' + hourlyRate.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('totalRevenue').innerText = '$' + totalRevenue.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('billableDays').innerText = actualBillableDays.toFixed(1) + ' days';
resultsSection.style.display = 'block';
}
How to Calculate Your Day Rate Correctly
Determining the correct day rate is one of the most critical challenges for freelancers, contractors, and consultants. Unlike a salaried employee who receives a consistent paycheck regardless of sick days or holidays, a freelancer must factor in all costs of doing business, unbillable time, and desired profit margins into every invoice.
Simply taking a previous annual salary and dividing it by 365 is a recipe for financial disaster. This simplified method ignores the reality of taxes, overhead, and the significant amount of time spent on non-billable tasks such as business development and administration.
The Reverse Engineering Method
To calculate a sustainable day rate, you must work backward from your financial goals. The process involves three distinct steps:
Define Your Target Income: This is the gross salary you wish to earn. If you are leaving a full-time job, you should aim for at least 20-30% higher than your previous salary to account for the loss of employer benefits like health insurance and 401k matching.
Calculate Total Overhead: Sum up all business expenses. This includes software subscriptions (Adobe, Office, Accounting), hardware upgrades, coworking space fees, professional insurance, and marketing costs.
Determine True Capacity: This is the most often overlooked variable. You cannot bill 365 days a year, nor can you bill 52 weeks a year.
Understanding Billable Efficiency
One of the inputs in the calculator above is "Billable Time (%)." This represents the efficiency of your workday. Even if you sit at your desk for 8 hours, you likely cannot bill a client for all 8 hours.
A healthy freelance business typically operates at a 60% to 75% billable efficiency rate. The remaining 25-40% of your time is spent on:
Invoicing and chasing payments
Answering emails and scheduling calls
Marketing and finding new clients
Skill development and training
If you do not factor this "unpaid" time into your day rate, you will effectively be working for free during those hours.
Example Calculation
Let's look at a realistic scenario for a senior graphic designer:
While this calculator provides an hourly equivalent, billing by the day is often advantageous for senior contractors. Day rates shift the client's focus from "how many minutes did you work?" to "did you secure the day's value?". It simplifies tracking and often results in higher overall earnings by discouraging clients from micromanaging your time.