Freelancer hourly rate calculator
Start from the take-home you want and work back to the rate you need to charge, once tax, expenses and unbilled time are counted.
How this is calculated
The profit needed is the amount that leaves your target after income tax and Class 4 National Insurance, worked out at this year's rates.
Turnover needed is that profit plus your expenses. Dividing by your billable hours in a year gives the hourly rate.
The day rate is the hourly rate times the hours in a working day.
Rates used · 2026/27
| Income tax | this year's bands |
| Class 4 National Insurance | 6% then 2%, on profit above £12,570 |
| VAT | not included, add it on top if registered |
| Billable time | your estimate |
Last checked July 2026. Source: HMRC and gov.uk.
Worked example
To take home £40,000 a year you need £49,638 of profit after £9,638 of income tax and Class 4 NI. Add £3,000 of expenses and turnover has to be £52,638. Billing 25 hours a week for 44 weeks, that is £47.85 an hour, or £358.89 for a 7.5 hour day.
Common questions
Why is the hourly rate so much higher than a salary per hour?
Because you are not paid for holidays, sickness, admin or finding work, and you pay your own expenses and pension. Those all have to come out of the hours you can bill.
How many billable hours is realistic?
Many freelancers bill 20 to 30 hours in a full working week once admin and sales are counted.
Should I charge by the hour or the day?
Either. Day and project rates are common for longer work and avoid clients watching the clock.
Does this work for a limited company?
Not exactly. A limited company pays corporation tax and you take salary and dividends, which changes the tax. Use the dividend tax and corporation tax calculators for that.