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    Freelance Rate Calculator

    Calculate your ideal freelance hourly and day rate based on target income, expenses, tax, holidays, and billable hours.

    Free to use. Runs in your browser.

    Enter your desired annual income, business expenses, and time off to calculate the freelance rate you need to charge.

    Why Freelancers Must Charge More Than Employees

    If a salaried employee earns £25/hour, a freelancer doing the same work needs to charge £35-45/hour to match their total compensation. The gap covers everything an employer provides "for free": holiday pay, sick pay, pension, employer NI, equipment, training, and office space.

    The biggest hidden cost is non-billable time. A freelancer typically bills 5-6 hours per 8-hour day. The rest goes to admin, invoicing, marketing, pitching, learning, and managing the business itself. If you price based on 8 billable hours, you're working for less than you think.

    UK Freelance Rates by Profession

    ProfessionHourly (Junior)Hourly (Mid)Hourly (Senior)
    Web developer£25 to 40£40 to 65£65 to 100
    Graphic designer£20 to 30£30 to 50£50 to 80
    Copywriter£20 to 35£35 to 55£55 to 90
    Photographer£25 to 40£40 to 75£75 to 150
    Management consultant£50 to 80£80 to 150£150 to 300

    What this means for you: London rates are typically 15-25% higher. Direct client rates are higher than platform rates (Fiverr, Upwork). Your rate should reflect your experience, specialisation, and the value you deliver, not just what others charge.

    The Hidden Costs of Freelancing

    Employees don't see these costs because their employer absorbs them. As a freelancer, they come straight out of your rate:

    CostTypical AnnualNotes
    Holiday (28 days)£4,000 to 8,000Lost billable days
    Sick days (5 days avg)£700 to 1,500No statutory sick pay for self-employed
    Pension contributions£2,000 to 6,000No employer match, it's all on you
    Accountant + software£500 to 2,000Tax returns, VAT, bookkeeping
    Insurance (PI + PL)£300 to 1,200Professional indemnity, public liability
    Equipment + software£500 to 3,000Laptop, licences, subscriptions

    Add these up and you're looking at £8,000 to 22,000 per year in costs that employees never see. That's why a £50/hour freelancer and a £50,000/year employee aren't earning the same thing, the freelancer might actually be earning less after overheads.

    The Rate-Setting Formula

    Step 1: Target annual income

    What you want to take home after tax and expenses. Be realistic, use your current salary as a baseline if you're transitioning from employment.

    Step 2: Add overhead costs

    Tax, NI, pension, insurance, equipment, accounting. For UK freelancers, add roughly 40-50% on top of your target take-home.

    Step 3: Divide by billable days

    Not 260 working days, more like 180-200 after holiday, sick days, admin, and quiet periods. That's your day rate.

    Step 4: Divide by billable hours

    5-6 billable hours per day, not 8. Divide your day rate by 5.5 for a realistic hourly rate that actually sustains your business.

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    Part of a workflow

    UK Freelancer Workflow

    Pricing → Invoicing → VAT → Tax → Take-home. Six steps, every tool free.

    How to use this tool

    1

    Enter your target annual take-home income

    2

    Add annual business expenses

    3

    Set your tax rate, holidays, and billable hours per day

    Common uses

    • Setting your freelance hourly and day rate
    • Calculating the rate needed to match an employee salary
    • Factoring in tax, expenses, and non-billable time
    • Planning income goals around realistic billable hours
    • Comparing rates across different freelance specialisms

    Share this tool

    Frequently Asked Questions

    Why is the freelance rate higher than an employee hourly rate?
    Freelancers must cover: tax, National Insurance, pension, holidays, sick days, equipment, software, insurance, accounting fees, and admin time. An employer covers all of these for employees. The true cost of an employee to an employer is 1.2-1.4x their gross salary.
    What are billable hours?
    Hours you can actually charge clients for. A typical freelancer bills 5-6 hours of an 8-hour day. The rest goes to admin, invoicing, marketing, pitching, learning, and running the business. Pricing based on 8 billable hours undervalues your time.
    Should I include business expenses?
    Yes, include everything: software subscriptions, equipment depreciation, professional insurance, accounting fees, co-working space, internet, phone, travel, and CPD. These are real costs that eat into your income. Most freelancers underestimate expenses by 20-30%.
    What tax rate should I use?
    Use your effective tax rate, the average across all bands, not your marginal rate. In the UK, a £50,000 income gives an effective rate of roughly 25-30% (Income Tax + Class 2 and 4 NI). If unsure, 25-30% is a reasonable estimate for most UK freelancers.
    How many billable days should I plan for?
    Start with 260 working days, subtract holidays (25-30), sick days (5-10), and admin/marketing days (20-30). Realistic billable days: 190-210 per year. New freelancers should plan conservatively (180 days) until they have a reliable pipeline.
    Should I charge hourly or daily?
    Day rates are standard for consulting, development, and design contracts. Hourly rates suit shorter engagements, ad-hoc work, or retainer arrangements. Daily rates are simpler to invoice and reduce the temptation to micro-track time.
    How do I know if my rate is competitive?
    Research rates on freelance platforms (Upwork, PeoplePerHour), job boards (Indeed, Otta), and community surveys (Hacker News 'Who's Hiring'). But platform rates are typically 30-50% lower than direct client rates. Your rate should reflect value delivered, not just market average.
    What about value-based pricing?
    Instead of hourly rates, price based on the value you deliver. A logo that generates £100,000 in brand value is worth more than 10 hours of design time. Value pricing works best for experienced freelancers with clear ROI for clients.
    Should I offer discounts for long-term contracts?
    A 5-10% discount for a 3-6 month commitment can be worthwhile, guaranteed income reduces your risk and marketing costs. But never discount more than 15%, and always define scope clearly. Open-ended discounts with scope creep destroy profitability.
    How do I raise my rates?
    Give existing clients 30-60 days notice. Apply new rates to all new clients immediately. Justify with market data, increased experience, or expanded scope. Most clients expect annual rate reviews. If nobody ever pushes back on your rate, it's probably too low.
    What about IR35 and contractor status?
    IR35 determines whether you're taxed as an employee or self-employed. Inside IR35, the client deducts tax and NI before paying you. Outside IR35, you handle your own tax through your limited company. IR35 status significantly affects your take-home pay.
    Should I register for VAT as a freelancer?
    Mandatory if taxable turnover exceeds £90,000. Voluntary registration below this threshold lets you reclaim VAT on expenses, but means charging clients 20% more (which they can reclaim if VAT-registered). B2B freelancers often benefit; B2C usually don't.

    Results are for general informational purposes only and should be checked before use. They are not professional advice. See our Disclaimer and Terms of Service.