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Freelance Rate Calculator

Income and expenses

What you want to take home before personal income tax

Software, insurance, training, workspace, marketing

Working days

Typically 260 for a standard 5-day week

% of available days you can bill to clients. 65-75% is typical.

Enter your income target and working pattern to calculate your minimum day rate.

Most freelancers set their rate by guessing what sounds reasonable or matching what others charge. This calculator works backwards from what you actually need to earn. Enter your desired annual income after business costs, subtract holiday and non-billable time, and it gives you the minimum day rate and hourly rate to charge - and the monthly revenue you need to hit to stay on track.

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Rate calculations are estimates based on the inputs you provide. Tax treatment, employment law, and actual billable days vary by country, jurisdiction, and individual circumstances. This tool does not constitute financial or tax advice.

How to use this tool

  1. 1Enter your annual income target - what you want to take home before personal income tax after all business costs are paid.
  2. 2Enter your total annual business expenses: software, hardware, insurance, workspace, training, marketing, accountancy fees. These must be earned on top of your income target.
  3. 3Enter the number of working days per year (typically 260 for a 5-day week minus weekends), then subtract your holiday days and sick-day allowance.
  4. 4Enter your billable utilisation rate - the percentage of working days you can realistically bill to clients. Allow for pitching, admin, networking, and downtime. 65-75% is typical for freelancers.
  5. 5Read your minimum day rate, hourly rate (assuming 8-hour days), monthly revenue target, and required weekly billing rate.

Formula used

Total annual revenue needed = income target + annual business expenses. Billable days = (working days per year - holiday days - sick days) x utilisation rate. Minimum day rate = total annual revenue / billable days. Hourly rate = day rate / 8. Monthly revenue target = total annual revenue / 12.

Example

UK-based freelance graphic designer

Income target: 45,000. Annual expenses: 4,800 (software, hardware, workspace). Total revenue needed: 49,800. Working days: 260. Holidays: 25. Sick days: 5. Billable days at 70%: (260 - 30) x 0.70 = 161 days. Minimum day rate: 49,800 / 161 = 309. Hourly rate (8h): 38.63. Monthly revenue target: 4,150.

US-based freelance developer

Income target: 80,000. Annual expenses: 8,000 (cloud tools, home office, insurance, accounting). Total revenue needed: 88,000. Working days: 260. Holidays: 15. Sick days: 5. Billable days at 75%: (260 - 20) x 0.75 = 180 days. Minimum day rate: 88,000 / 180 = 489. Hourly rate: 61.11. Monthly revenue target: 7,333.

Common use cases

  • New freelancers setting their first day rate and wanting to ensure it covers their actual needs
  • Employed workers comparing a freelance income offer against their current salary and benefits package
  • Freelancers reviewing their rate after a year and checking whether it still meets their income and expense requirements
  • Agency owners calculating the cost of bringing in a freelancer versus hiring a full-time employee
  • Consultants setting a project fee based on their day rate and estimated hours

Common mistakes

  • Not including business expenses in the calculation - tax, insurance, software, and equipment are costs that come out of freelance income and must be earned back.
  • Overestimating billable days - most freelancers bill only 60-75% of working days; the rest is admin, pitching, and non-billable time.
  • Comparing the day rate to a salary without accounting for employer benefits - a freelance day rate must also cover holiday pay, sick pay, pension, and employer NI/SS that an employer would otherwise cover.
  • Setting the rate as the target, not the floor - this calculator gives the minimum viable rate; your market rate should ideally be higher, especially with experience.

Frequently asked questions

Should I include tax in my income target?

This calculator works with pre-personal-tax income. Enter the gross income you want to take home before you pay personal income tax. Set your income target high enough that after paying income tax, you end up with the net income you need. A rough rule: if your effective tax rate is 25%, your income target should be your desired take-home divided by 0.75.

What billable utilisation rate should I use?

For new freelancers still building a client base, 50-60% is more realistic. Established freelancers with regular clients often achieve 70-80%. Very in-demand specialists may hit 85%+. Be conservative when setting your rate - it is easier to lower your rate later once you are fully booked than to explain a rate increase to clients.

What counts as a business expense?

Include software subscriptions (design tools, project management, communication), hardware depreciation, home office or workspace rental, professional insurance, training and courses, accounting fees, business bank charges, marketing and website costs, and any travel that is business-only. Do not include personal living costs - those are covered by the income target.

How is this different from an employment salary?

A freelance day rate must cover everything an employer would otherwise provide: employer payroll taxes, pension contributions, holiday pay, sick pay, equipment, and software. As a rule of thumb, multiply your desired employed salary by 1.5 to 2 to get the freelance equivalent before running this full calculation.

Is my data stored or uploaded?

No. All calculations run in your browser. Nothing is sent to any server.

What if I want to earn more than the minimum?

This gives you the minimum floor below which you cannot price without losing money. If the market supports a higher rate, charge more - the extra becomes profit above your target income. The minimum rate is a sanity check, not a ceiling.

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