Freelance Rate Calculator
Salary ÷ 2,080 understates it by roughly half.
Work out Freelance Rate. Salary ÷ 2,080 understates it by roughly half. Free, with no account and nothing to install.
Minimum hourly rate
75.61
605 a day · 3.15× the naive salary-per-hour figure
Dividing a salary by 2,080 hours is the standard mistake, and it understates the required rate by roughly half. Unbillable time, holiday, sickness, self-employment tax, insurance, equipment and pension are all things an employer was paying for invisibly, and every one has to come out of the billable hours. The billable share is where most of the difference lives. At 70% utilisation across 44 working weeks, a 40-hour week yields about 1,230 billable hours a year — not the 2,080 the naive calculation assumes. The profit margin is not greed. It is what covers a slow quarter, a client that does not pay, the equipment that breaks and the time spent finding the next contract. A rate with no margin is a rate that fails the first time something goes wrong.
How the Freelance Rate Calculator works
The hourly rate needed to match a target take-home, counting unbillable time, holiday, tax, overheads and margin. Dividing a salary by 2,080 hours is the standard mistake and it understates the answer by about half.
Also known as: what should i charge as a freelancer · salary to day rate calculator · contractor rate from salary · how much more than my salary should i charge
Not financial advice. This calculator is for planning and illustration, not financial advice. Real products carry fees, taxes, and terms it does not model. Confirm figures with your lender or a qualified adviser before committing.
Frequently asked questions
How do I set a freelance rate?
Work backwards from target take-home, adding tax, pension, overheads and margin, then divide by realistic billable hours — not by 2,080. The result is typically 1.5 to 2.5 times the naive figure.
Why is the naive calculation so wrong?
It assumes every working hour is billable and free of cost. Unbillable time, holiday, sickness, self-employment tax, insurance and equipment were all being paid for invisibly by an employer.
How many billable hours are realistic?
Around 1,200 to 1,400 a year for a full-time freelancer — 44 working weeks at 40 hours and 70% utilisation. Not the 2,080 the naive calculation assumes.
Should I charge by the hour or the day?
Day rates are the norm for longer engagements and simpler to administer; hourly suits fragmented work. The underlying arithmetic is identical — the day rate here is eight hours.
Why include a profit margin?
Because it covers a slow quarter, a client that does not pay, equipment that breaks and the time spent finding the next contract. A rate with no margin fails the first time anything goes wrong.
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