Freelance Rate Calculator

Most new freelancers set their rate by dividing what they earned in their last salaried job by the hours worked. This is wrong by roughly half. As an employee, your salary already excludes employer NI (15% above £5,000 from April 2026), pension contributions (3% minimum auto-enrolment), holiday pay (28 days minimum statutory), sick pay, tools and software, accountancy, professional insurance, and the gap between contracts. As a freelancer, every one of those becomes your problem. The calculator works backwards from your desired take-home figure to the gross daily rate you actually need to charge.

A worked example: you want £40,000 take-home, can realistically bill 48 weeks a year at 5 days a week and 7 billable hours per day (1,680 billable hours), assume 20% effective tax (a sole trader earning £40k pays roughly 18% income tax plus 8% NI minus the personal allowance, but you can use 20% as a working approximation), £500 a month in business expenses (insurance, software, accountant), and a 20% profit margin on top. The calculator returns roughly £45 to £50 per hour or £315 to £350 per day. UK freelance developers typically charge £300 to £600 per day in 2026; designers £250 to £500; copywriters £200 to £450, depending on seniority and specialism.

If you sit at your desk for 40 hours a week, you do not bill 40 hours a week. The realistic figure is closer to 60-70% of seat time, with the rest going to admin, marketing, invoicing, scope discussions, client emails, and dead time between projects. Senior freelancers in stable retainers can hit 80%, but new freelancers chasing work usually bill closer to 50%. The calculator's 'hours per day' field should be billable hours, not seat hours - if you set it to 8 you are assuming a fully-utilised day every day, which is rare.

Adjust the working weeks downward for realism. 52 weeks minus four weeks holiday minus a week sick is 47 weeks. New freelancers who cling to '50 working weeks at 8 hours a day = 2,000 billable hours' produce rates that look reasonable until they realise they are quoting £35 an hour but only ever billing 1,200 hours, leading to actual income of £42,000 instead of the £70,000 they thought they would earn. Plan from honest billable capacity, not from arithmetic ceiling.

Inside IR35 contracts (where HMRC treats you as effectively employed despite being a contractor) net you significantly less than outside-IR35 contracts at the same headline day rate, because PAYE tax and employee NI is deducted at source. A £500 inside-IR35 day rate nets you roughly the same as a £350 outside-IR35 rate after personal NI and the additional employer NI passed back through the umbrella. Whenever you are quoted a day rate for a long-term contract, ask immediately whether it is inside or outside IR35.

The Off-Payroll Working rules (which moved IR35 determination from the contractor to the end client for medium and large businesses) mean most large UK employers default contractors to inside-IR35 to avoid risk. This has compressed outside-IR35 rates upward (clients willing to take the risk pay a premium) and inside-IR35 rates downward (umbrella overheads eat 5-8% off the top before tax). For non-IR35 work like one-off projects for sole traders or small businesses, the freelance rate this calculator produces is the rate to charge directly. For longer-term contracts inside large organisations, multiply by roughly 1.4 to account for IR35 leakage and use the [Salary to Hourly Converter](/salary-to-hourly-converter) cross-check.