Working out what to charge as a freelancer can be surprisingly difficult. You need to earn enough to cover your personal income, business expenses, holidays and time spent doing work that you can’t charge a client for.

Our free Freelance Rate Calculator helps you work out an hourly rate and daily rate based on the income you want to achieve and the amount of time you realistically expect to spend working.

Simply enter your income goal, business expenses, holidays, working hours and other details. The calculator will give you an estimated hourly rate, daily rate and the amount of revenue you need to generate each year.

How much should I charge as a freelancer?

There isn’t one freelance rate that works for everyone.

A freelancer charging £30 an hour may have very different costs and financial goals from someone charging £75 or £100 an hour. Your rate needs to reflect your experience, the type of work you provide, your market and how much of your working time you can actually bill to clients.

It’s also important to remember that freelancers don’t usually get paid for every hour they spend working.

You might spend part of your week:

• Answering emails
• Finding new clients
• Preparing proposals
• Managing your accounts
• Marketing your business
• Attending meetings
• Completing administration
• Learning new skills
• Planning projects

This is known as non-billable time. Your freelance rate needs to take this into account.

How does the Freelance Rate Calculator work?

The calculator starts with the amount of income you would like to earn and then considers the costs and time involved in running your freelance business.

It takes into account things such as:

• Your desired annual income
• Business expenses
• A tax and deductions buffer
• Holiday days
• Sick or personal days
• Billable hours
• Non-billable working time
• Pension or savings contributions

It then estimates how much revenue you need to generate and works backwards to calculate an hourly and daily rate.

The result is a useful starting point when deciding what to charge clients.

Why can’t I simply divide my salary by the number of hours I work?

Freelancing is different from being an employee.

An employee might receive paid holiday, sick pay, pension contributions and other benefits as part of their employment package. A freelancer generally needs to account for these costs themselves.

You also have to cover periods when you aren’t working for a client.

For example, imagine you want to earn £40,000 a year. You can’t necessarily divide £40,000 by 2,000 working hours and decide that £20 an hour is enough.

You won’t necessarily have 2,000 billable hours.

If you take holidays, have time off when you’re ill and spend several hours each week on administration or finding clients, the number of hours you can actually charge for could be considerably lower.

That’s why a freelance rate often needs to be higher than the equivalent employee hourly wage.

What is a good freelance hourly rate?

A good freelance rate is one that allows you to cover your costs and achieve your financial goals while remaining realistic for the market you’re working in.

Rates vary considerably depending on your profession and experience.

For example, a freelance designer, developer, copywriter, consultant and photographer may all have completely different pricing structures.

Your experience also matters. Someone who provides a specialist service that is difficult to find may be able to charge considerably more than someone offering a service with lots of competition.

Rather than choosing a rate simply because another freelancer charges it, use the calculator to work out the minimum rate that makes sense for your own finances.

You can then compare that figure with the rates being charged in your industry.

How much should a freelancer charge per day?

A freelance day rate depends on your hourly rate and the number of hours you consider chargeable during a typical working day.

For example, if your target hourly rate is £50 and you work six billable hours in a day, your equivalent day rate would be:

£50 × 6 = £300

However, your actual day rate could be higher or lower depending on the type of work you do, the value you provide and how you structure your pricing.

Some freelancers prefer to quote a day rate rather than an hourly rate because it makes project pricing simpler for both the freelancer and the client.

Why is my freelance rate higher than my old salary?

This is normal.

When you were employed, your salary was only one part of the total value of your employment package. Your employer may also have paid National Insurance, pension contributions, holiday pay and other employment costs.

As a freelancer, you are responsible for running the business and covering costs that an employer would normally handle.

You also have to account for time when you’re not earning directly from a client.

Your freelance rate therefore needs to cover more than simply replacing your previous salary.

How many hours can a freelancer realistically bill?

This depends on your type of work and how your business operates.

If you work an eight-hour day, that doesn’t necessarily mean you can bill clients for eight hours.

You may have to spend time on administration, marketing, sales, bookkeeping, meetings and other tasks.

For example, if you work eight hours but only six of those hours are normally billable, your billable utilisation is 75%.

This is why the calculator allows you to enter your expected non-billable time.

Being realistic here can make a big difference to the rate you need to charge.

Don’t forget about holidays

One of the easiest things for new freelancers to overlook is holiday time.

If you want to take four weeks away from work during the year, those are four weeks when you may not generate your normal freelance revenue.

You therefore need to make sure your remaining working days can generate enough income to meet your annual target.

The calculator allows you to enter your holiday days so that your rate isn’t based on working every weekday of the year.

What business expenses should freelancers include?

Your business expenses will depend on what you do, but they could include:

• Laptop and computer equipment
• Software subscriptions
• Website and hosting costs
• Professional insurance
• Accountancy fees
• Advertising and marketing
• Office costs
• Coworking space
• Professional memberships
• Training and courses
• Business travel
• Phone and internet costs

Some expenses may be deductible for tax purposes depending on your circumstances, but you should keep accurate records and get professional advice if you’re unsure whether a particular cost is allowable.

Should freelancers charge by the hour or by the day?

There isn’t a right answer.

Hourly pricing can work well when the amount of work is uncertain or when clients specifically want to purchase your time.

A day rate can be easier when you’re working on a project over several days or when the client wants you available for a particular period.

Some freelancers eventually move away from time-based pricing altogether and charge based on the value or outcome they provide.

Even if you ultimately use project pricing, knowing your minimum hourly or daily rate can still be useful when deciding whether a project is financially worthwhile.

How do I calculate my freelance day rate?

A simple way to estimate your day rate is to multiply your target hourly rate by the number of billable hours in your normal working day.

For example:

£60 hourly rate × 6 billable hours = £360 day rate

Remember that your billable hours aren’t necessarily the same as the number of hours you spend working.

If you work eight hours but spend two hours on administration and other non-billable tasks, you may only have six hours that can realistically be charged to a client.

How do I calculate my freelance hourly rate?

A useful starting point is:

Required annual revenue ÷ annual billable hours = target hourly rate

Your required annual revenue needs to account for the income you want, business expenses, tax and other amounts you want your freelance business to contribute towards.

Your annual billable hours should also reflect holidays, time off and the proportion of your working time that isn’t billable.

That’s what our calculator is designed to help you work out.

What if the calculator gives me a rate that seems too high?

Don’t immediately assume the number is wrong.

It may simply highlight that your current income goal requires more revenue than your available billable hours can produce.

You have several options:

Increase your rate.
If your experience and the market allow it, charging more may be the simplest solution.

Increase your billable work.
Finding more suitable clients can increase your revenue without necessarily increasing your working hours.

Reduce your expenses.
Lower business costs can reduce the amount of revenue you need to generate.

Adjust your income goal.
Your target may need to change depending on your current circumstances.

Improve your utilisation.
Reducing unnecessary non-billable work can increase the number of hours available for paying clients.

The goal isn’t necessarily to work more. It’s to create a freelance business that can support the income and lifestyle you want.

Should I include tax in my freelance rate?

You should plan for tax when deciding what you need to earn.

The exact amount of tax you pay will depend on factors such as your income, business structure and personal circumstances.

That’s why our calculator uses a tax and deductions buffer rather than attempting to provide a personalised tax calculation.

The figure is designed to help you plan your required revenue. It shouldn’t be treated as a precise estimate of your actual tax bill.

If you’re unsure about your tax position, speak to a qualified accountant or tax adviser.

What is a freelance rate calculator useful for?

A freelance rate calculator can be useful when you’re:

• Starting a freelance business
• Moving from employment to freelancing
• Reviewing your existing prices
• Negotiating a new contract
• Deciding whether to accept a project
• Comparing hourly and daily rates
• Setting an annual income goal
• Planning your freelance finances

It can also be useful to revisit your numbers periodically. Your expenses, experience, income goals and working arrangements can all change over time.

Freelance rate calculator example

Let’s say you want to generate £50,000 of personal income from your freelance business.

You have £5,000 of annual business expenses and want to put another £3,000 towards pension or savings.

You work 235 days a year after accounting for holidays and time off, but only around 70% of your working time is realistically billable.

If you work six billable hours on a typical working day, you won’t have 235 × 6 hours available to charge clients.

Your actual billable hours will be lower because of the non-billable work.

This is why simply choosing an hourly figure based on your desired salary can result in charging too little.

Enter your own figures into the calculator above to see what rate you may need to achieve your target.

Review your freelance rate regularly

Your freelance rate doesn’t have to stay the same forever.

As you gain experience, develop specialist skills and build a stronger reputation, you may be able to increase what you charge.

Your costs can also change. Software subscriptions, insurance, equipment and other business expenses may increase over time.

It’s worth reviewing your pricing at least once a year and whenever your circumstances change significantly.

The important thing is to make sure your rates still support the business and lifestyle you’re trying to build.

Frequently Asked Questions

What is a freelance rate?

A freelance rate is the amount a freelancer charges a client for their time or services. It can be expressed as an hourly rate, daily rate or another pricing structure. You can freelance through Upwork, Fiverr or through one of the many freelance platforms as well as through your own website or even social media.

What is the difference between a freelance hourly rate and day rate?

An hourly rate charges for individual hours of work, while a day rate charges a set amount for a day’s work. A day rate is often based on the number of billable hours a freelancer normally works during a day.

How much should I charge as a new freelancer?

There isn’t a single rate that every new freelancer should use. Start by working out the income you need, your business costs and the amount of time you can realistically bill. Then compare your calculated rate with typical rates in your industry and adjust according to your experience and the value you provide.

How many hours should a freelancer work?

That depends entirely on the individual. The important distinction is between total working hours and billable hours. A freelancer may work eight hours in a day but only have five or six hours that can be charged to clients.

Should I charge more for freelance work than an employee earns per hour?

Often, yes. Freelancers generally need to cover their own business expenses, holidays, pension contributions, periods without work and non-billable time. However, the appropriate rate depends on the type of work, experience, market and value provided.

Can I use this calculator for a freelance day rate?

Yes. Enter your desired income, working arrangements and other costs, and the calculator will provide an estimated hourly rate as well as an equivalent daily rate.

Is this calculator suitable for UK freelancers?

Yes. The calculator uses pounds sterling and is designed to help freelancers in the UK plan their rates. However, it is a planning tool rather than a personalised UK tax calculator.

Can I share my freelance rate calculation?

Yes. Use the Share My Results button to create a shareable version of your calculation. You can send the resulting link to someone else so they can see the same figures.

Start with the number that makes sense for you

There is no perfect freelance rate that applies to everyone.

The right starting point is your own numbers: how much you want to earn, how much it costs to run your business and how much of your working time you can realistically charge for.

Use the calculator above to work backwards from your income goal and see what hourly and daily rates could work for you.

Once you have a figure, compare it with your industry and the value you provide. You can then decide whether your pricing needs to change, whether you need to find higher-value work, or whether your income target needs adjusting.