Freelancer Rate Calculator

Use this formula: (target take-home + taxes + expenses) ÷ billable days. A £50,000 take-home target, £5,000 expenses, and 200 billable days requires approximately £370/day minimum.

Day rates vary hugely by skill and sector. Software developers: £400-£800. Marketing consultants: £300-£600. Graphic designers: £200-£400. Finance contractors: £350-£700. Location and experience matter greatly.

After holidays (20-25 days), bank holidays (8), sick time, business development, and bench time, most freelancers bill 180-220 days per year. Use 200 as a conservative planning figure.

Day rates protect you when scope expands. Project rates appeal to clients wanting certainty. For unclear scope, day rate is safer. For well-defined projects you can deliver efficiently, project rates can be more profitable.

As a sole trader, income tax (20/40%) and Class 2/4 NI reduce your take-home. A £70,000 gross income as a sole trader leaves approximately £46,000-£48,000 after tax and NI.

Above ~£30,000 profit, a limited company is usually more tax-efficient. Directors pay themselves a small salary (£12,570/year) and extract dividends at lower tax rates. The gap has narrowed with recent tax changes.

Register for VAT when turnover exceeds £90,000. Add 20% to your invoices and remit quarterly. The Flat Rate Scheme simplifies VAT for small freelancers. VAT-registered business clients can reclaim the VAT.

Deductible expenses include: professional indemnity insurance, accounting software, subscriptions, equipment (or capital allowances), work-related training, marketing, and home office costs (if genuinely home-based).

Freelancers must manage their own pension. Contributions to a SIPP get 20-40% tax relief. Limited company directors can make employer pension contributions from the company, saving corporation tax.

IR35 (off-payroll working rules) applies if you provide services to clients through a limited company but would be employed if engaged directly. Inside IR35 means paying employment taxes on those engagements.

New clients carry higher risk — build in a premium. Repeat clients are valuable — consider discounts for volume or retainer arrangements. Never price yourself so low that the work is not financially worthwhile.

Technology: £350-£1,000. Management consulting: £500-£1,500. Marketing: £300-£700. Legal: £500-£2,000. Creative: £200-£500. Data science: £400-£900. Always research market rates for your specific specialism.