Day rate calculator
What a day rate is actually worth once the unbilled days, the expenses and the tax have all had their turn.
How this is calculated
Turnover is the day rate multiplied by billable days. Expenses come off to give taxable profit, and income tax and Class 4 National Insurance are applied to that.
The billable days figure does most of the work. A £400 day rate at 200 days is a very different business from the same rate at 240 days, and optimism about that number is the most common mistake in freelance pricing.
The salary equivalent is the employed salary that would leave the same take-home. It is a fair comparison of cash and an unfair comparison of everything else.
This treats you as a sole trader. Through a limited company the calculation is different, with corporation tax and a salary and dividend split instead.
Rates used · 2026/27
| Working days a year | about 253 before holiday |
| Class 4 NI | 6% from £12,570 to £50,270, then 2% |
| Not included | pension, paid holiday, sick pay, notice period |
| Limited company | taxed differently, see the dividend calculator |
Last checked July 2026. Source: HMRC and gov.uk.
Worked example
A £400 day rate over 200 billable days is £80,000 of turnover. Take off £4,000 of expenses and the taxable profit is £76,000. Income tax and Class 4 National Insurance come to £20,609, leaving £55,391, or £4,616 a month. That is roughly what a £77,300 salary would pay, before counting the pension and holiday you no longer get.
Common questions
How many billable days should I assume?
Most established freelancers land between 180 and 220. Assuming 240 or more usually means you have not allowed for holiday, illness, admin and the gaps between contracts.
Is the salary comparison fair?
On cash, yes. It ignores employer pension contributions, paid holiday, sick pay and notice, which together are commonly worth 20% to 30% on top of a salary.
Should I use a limited company instead?
It can be more tax efficient above a certain profit level, but it brings accounts, corporation tax and more admin. Model both and take advice before switching.
What day rate matches my old salary?
Adjust the day rate until the take-home matches, then add a margin. Matching take-home alone leaves you worse off once lost benefits are counted.