Freelance Rate Calculator
Calculate your ideal freelance hourly and day rate based on target income, expenses, tax, holidays, and billable hours.
Enter your desired annual income, business expenses, and time off to calculate the freelance rate you need to charge.
Why Freelancers Must Charge More Than Employees
If a salaried employee earns £25/hour, a freelancer doing the same work needs to charge £35-45/hour to match their total compensation. The gap covers everything an employer provides "for free": holiday pay, sick pay, pension, employer NI, equipment, training, and office space.
The biggest hidden cost is non-billable time. A freelancer typically bills 5-6 hours per 8-hour day. The rest goes to admin, invoicing, marketing, pitching, learning, and managing the business itself. If you price based on 8 billable hours, you're working for less than you think.
UK Freelance Rates by Profession
| Profession | Hourly (Junior) | Hourly (Mid) | Hourly (Senior) |
|---|---|---|---|
| Web developer | £25–40 | £40–65 | £65–100 |
| Graphic designer | £20–30 | £30–50 | £50–80 |
| Copywriter | £20–35 | £35–55 | £55–90 |
| Photographer | £25–40 | £40–75 | £75–150 |
| Management consultant | £50–80 | £80–150 | £150–300 |
What this means for you: London rates are typically 15-25% higher. Direct client rates are higher than platform rates (Fiverr, Upwork). Your rate should reflect your experience, specialisation, and the value you deliver — not just what others charge.
The Hidden Costs of Freelancing
Employees don't see these costs because their employer absorbs them. As a freelancer, they come straight out of your rate:
| Cost | Typical Annual | Notes |
|---|---|---|
| Holiday (28 days) | £4,000–8,000 | Lost billable days |
| Sick days (5 days avg) | £700–1,500 | No statutory sick pay for self-employed |
| Pension contributions | £2,000–6,000 | No employer match — it's all on you |
| Accountant + software | £500–2,000 | Tax returns, VAT, bookkeeping |
| Insurance (PI + PL) | £300–1,200 | Professional indemnity, public liability |
| Equipment + software | £500–3,000 | Laptop, licences, subscriptions |
Add these up and you're looking at £8,000–22,000 per year in costs that employees never see. That's why a £50/hour freelancer and a £50,000/year employee aren't earning the same thing — the freelancer might actually be earning less after overheads.
The Rate-Setting Formula
Step 1: Target annual income
What you want to take home after tax and expenses. Be realistic — use your current salary as a baseline if you're transitioning from employment.
Step 2: Add overhead costs
Tax, NI, pension, insurance, equipment, accounting. For UK freelancers, add roughly 40-50% on top of your target take-home.
Step 3: Divide by billable days
Not 260 working days — more like 180-200 after holiday, sick days, admin, and quiet periods. That's your day rate.
Step 4: Divide by billable hours
5-6 billable hours per day, not 8. Divide your day rate by 5.5 for a realistic hourly rate that actually sustains your business.
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How to use this tool
Enter your target annual take-home income
Add annual business expenses
Set your tax rate, holidays, and billable hours per day
Common uses
- Setting your freelance hourly and day rate
- Calculating the rate needed to match an employee salary
- Factoring in tax, expenses, and non-billable time
- Planning income goals around realistic billable hours
- Comparing rates across different freelance specialisms
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