Work out a day rate that reaches your target income once tax, admin and downtime are accounted for.
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Change billable days per year to see the effect on your result.
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Target annual income is included so you can interpret this estimate and make a better-informed comparison.
Billable days per year is included so you can interpret this estimate and make a better-informed comparison.
Buffer for tax, admin & downtime is included so you can interpret this estimate and make a better-informed comparison.
IR35 status is included so you can interpret this estimate and make a better-informed comparison.
Freelancers need a day rate that covers not just target take-home income, but also tax, National Insurance, unpaid admin time, holidays and gaps between contracts — all of which an employee's salary doesn't have to absorb directly.
The calculator grosses up your target income by an overhead percentage (covering tax, admin and downtime), then divides by your expected billable days per year to find the day rate needed to hit that target.
This is a simplified planning model — your actual tax position depends on whether you operate as sole trader or limited company, and 'billable days' should realistically account for holidays, sick days, admin time and marketing, typically leaving fewer than 230 billable days in a year even when working full-time.
Be realistic about billable days (200 or fewer is common once admin, holidays and gaps between contracts are accounted for), and revisit your rate periodically as your target income or business costs change.
UK-specific contextFigures use GBP and current published rates and thresholds.
Reviewed for clarityUpdated 3 August 2026.
ImportantFor planning and educational use — not tax, legal or financial advice.
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Because a portion of every day's revenue needs to cover tax, National Insurance, business admin time, and periods without paid work — the overhead buffer accounts for all of that.
Many freelancers find 180–220 realistic once holidays, sick days, admin, and gaps between contracts are subtracted from the roughly 260 working days in a year.
No, if you're VAT-registered your invoiced day rate may need to include VAT on top of this calculated rate, depending on your client agreement.
Yes, effective tax rates differ between the two structures, so adjust the overhead percentage to reflect your actual tax and National Insurance position.
Rules and thresholds used by this calculator are labelled for 2026–27 or formula-labelled period. Review the primary guidance before making a filing, borrowing, benefit or investment decision.
Last source review: 3 August 2026. Calculator results are estimates and may exclude circumstances described in the methodology.
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