Day Rate Calculator

Add your income target and your annual business costs, then divide by the days you will actually bill. £90,000 plus £8,000 of costs over 220 days is £445 a day.

There are about 260 weekdays. Subtract holiday, sickness, public holidays, admin days, pitching and the gaps between contracts, and 200 to 220 is realistic for a busy independent. Assuming 260 sets a rate about 20% too low.

Multiply by billable days, then subtract business costs and the benefits an employer would have provided. A £500 day rate over 220 days is £110,000 gross, which is nothing like a £110,000 salary once pension, leave and sick pay are priced in.

Many contractors charge 60% of a day rate rather than 50%, because a half day still consumes the context switch and usually blocks the rest of the day. Whichever you choose, put it in the contract before it comes up.

They are the reason the rate is higher than a salary equivalent. Every unbilled week has to be carried by the billed ones, which is what the premium over an employed rate is actually paying for.

Raise the rate. Days are capped at roughly 220 and the rate is not, so it is the only lever with room in it — and working more days is the one that costs you the recovery time the work depends on.

In practice it often does — enterprise clients with procurement processes, long payment terms and heavy meeting overheads reasonably attract a higher rate than a small business with a clean brief. Publishing one rate and discounting is generally safer than quoting up.

Long terms are a financing cost. Thirty days is normal; sixty or ninety is worth pricing for, either through a higher rate or a deposit. A late payment clause you actually enforce is worth more than either.

A guaranteed monthly fee for reserved capacity. Because it removes your sales cost and your income uncertainty, a modest discount to the day rate is usually justified — but only if the capacity is genuinely reserved rather than open-ended.

Most contractors charge at least a half day plus expenses for travel that consumes working time. Whatever the answer, it belongs in the contract, because it is a predictable source of disagreement.

One day a fortnight is a common allowance for invoicing, bookkeeping, proposals and business development. It is not billable and it is not optional, which is why it comes out of the billable-days figure.

Your standard rate, not your best case. A published rate that you routinely exceed invites negotiation downward, and one you rarely achieve costs you enquiries. It should be the number you say most often.