Day Rate Calculator
What day rate do you need to charge to match a permanent salary? Or what's a given day rate actually worth after tax, holidays, pension, and business costs?
Tax year 2026/27· Updated with current HMRC rates
The permanent salary you want to match in take-home pay
Non-billable time
8 UK bank holidays added automatically. Every day here is a day without income.
Per month
Annual business costs
PI, public liability
% of profit
For hourly rate
Required Day Rate
£309/day
£39/hour
Annual take-home
£39,546
£3,296/month
Billable days
175
of 260 weekdays
Effective tax rate
22.1%
inc. all costs
Equiv. perm salary
£50,000
same take-home
What this means: At £309/day, your take-home matches a £50,000 permanent salary. Your gross revenue (£54,075) is 8.1% higher because you're covering what an employer normally pays: holidays (33 days), sick pay, pension, employer NICs, insurance, and gaps between contracts.
Remember: a perm role also typically includes employer pension (3-10%), private healthcare, training budget, and job security — worth roughly £7,505/year on top of salary. Factor this in when comparing offers.
Working days
A permanent employee with 25 days holiday works ~227 billable days. You're working 175 — fewer days, but each day must also cover the non-billable time.
Financial breakdown
Save your results
Email yourself a copy of these calculations to refer back to later.
How this works
- Based on HMRC 2026/27 tax rates. 8 UK bank holidays included automatically.
- “Salary → Day Rate” finds the day rate giving the same take-home as the equivalent permanent salary.
- Admin/business development time accounts for invoicing, proposals, marketing, and non-client work.
- The equivalent permanent salary comparison accounts for income tax and employee NICs. It does not include employer pension, healthcare, or other benefits.
- Hourly rate = day rate ÷ 8 hours.
How to calculate your freelancer day rate
Setting your day rate is one of the most important decisions as a UK freelancer. Charge too little and you'll earn less than a permanent employee doing the same work. Charge too much and you won't win contracts.
Why freelancers need to charge more than you think
A common mistake is dividing a target salary by 260 working days. This ignores that permanent employees receive paid holidays (28 days minimum), sick pay, employer pension contributions, and continuity of income. As a freelancer you get none of these — every non-billable day is a day without income.
The real costs of freelancing
- Holidays: 25 days + 8 bank holidays = 33 unpaid days
- Sick days: Budget for 3-5 days per year
- Contract gaps: Most freelancers have 2-6 weeks between contracts
- Pension: No employer contributions — you fund it yourself
- Insurance: Professional indemnity is typically £300-800/year
- Accountant: £800-2,000/year depending on structure
- Equipment: Laptop, software, phone — you buy your own
A typical example
To match a £50,000 permanent salary as a sole trader, you typically need a day rate of around £300-350/day. That might sound like £78,000+ per year, but once you subtract holidays, gaps, tax, NICs, pension, and business costs, you end up with roughly the same take-home as your permanently employed counterpart.
This calculator provides estimates based on current HMRC rates. Individual circumstances vary — always consult a qualified accountant for personalised advice.