Freelance Day Rate Calculator (UK)
You need to bill £4323.33 per month.
Based on 224 billable days per year (after 28 holiday days and 8 sick days).
Breakdown
| Gross revenue needed | £51880.00 |
| − Business expenses | −£2000.00 |
| − Pension contribution | −£0.00 |
| = Taxable profit | £49880.00 |
| − Income Tax | −£7462.00 |
| − Class 4 NI | −£2238.60 |
| − Class 2 NI | −£179.40 |
| = Net take-home | £40000.00 |
This is roughly equivalent to a £51880 permanent salary before the comparison breaks down. Unlike an employee, your freelance gross revenue also has to cover business costs that an employee wouldn’t pay (no pension match, no sick pay, no paid holiday, equipment, insurance, gaps between contracts). This is a rough guide only, not a direct comparison.
How to use this day rate calculator
Many freelancers start by dividing their desired salary by 260 working days, but that ignores several critical costs. This calculator helps you find a more realistic day rate by factoring in income tax, Class 4 National Insurance (NI), Class 2 NI, business expenses, pension contributions, and time off.
Why is 260 days unrealistic?
As a freelancer, you don’t get paid holidays or sick leave. You also have to account for non-billable time – chasing clients, doing admin, marketing your services, and professional development. Most freelancers find that 190–220 billable days per year is more realistic than 260. On top of that, you’ll have gaps between contracts, especially in the first few years. This tool lets you set your own holiday and sick day numbers, so you can adjust to your own situation.
How does tax work?
For the 2026/27 tax year, every sole trader in the UK (outside Scotland) has a Personal Allowance of £12,570 before they pay any income tax. Above that, profits are taxed at 20% (basic rate) up to £50,270, then 40% (higher rate) up to £125,140, and 45% (additional rate) above that. The Personal Allowance starts to reduce by £1 for every £2 of profits over £100,000. Class 4 NI is charged at 6% on profits between £12,570 and £50,270, and 2% on profits above £50,270. You also pay a flat Class 2 NI of £179.40 per year if your profits are at least £6,845.
Remember: this tool is for planning purposes only. It gives you a target day rate based on your inputs, but actual tax calculations can be more complex (e.g., if you have other income, student loan repayments, or work through an umbrella company). Always consult a qualified accountant for personalised advice.
Frequently asked questions
How many billable days should I actually use?
A common starting point is 220 days, which allows for 28 holiday days + 8 sick days + 4 weeks of non-billable time (admin, gaps between contracts, professional development). However, your actual billable days will depend on your industry and experience. If you are starting out, you might want to use 200 days to be more conservative.
Does this calculator include VAT?
No. VAT is not included in the numbers here. VAT is charged on top of your day rate if you are VAT-registered. This calculator assumes you are not registered for VAT – if you are, your day rate would need to be increased by 20% (or whatever VAT rate applies) to maintain the same net income.
What if I’m inside IR35?
This calculator is designed for self-employed sole traders (outside IR35). If you are inside IR35, you are effectively an employee for tax purposes: you pay income tax and NICs through your umbrella company, and you cannot deduct as many expenses. Different rules apply, and your day rate needs to be higher to compensate for the employer NI and the lack of tax relief. Use this tool at your own risk if you are inside IR35.