Key takeaways
- Start with the income and costs the business must support.
- Remove leave, admin and other non-billable capacity.
- Use utilisation honestly; not every working day is saleable.
- Treat the result as a floor, then price for scope, risk and value.
A sustainable freelance rate must cover personal pay, business costs, savings or pension provision, tax contingency and time that cannot be billed. This calculator works back from those inputs and shows a planning floor; it does not estimate your tax liability.
Private, local calculation
Your rate floor
Nothing is stored or sent. The estimate grosses up income, costs and savings for the selected contingency, then divides by realistically billable time.
Compare estimated billable capacity with recorded time. A manual timesheet is enough to start; use the invoice guide to transfer approved work into a payment request.
The formula
Revenue target = (personal pay + business costs + pension or savings allowance) ÷ (1 − tax contingency). Billable days = (260 weekdays − leave − other non-billable days) × utilisation. Day rate = revenue target ÷ billable days. Hourly rate = day rate ÷ billable hours per day.
The contingency is deliberately simple. It is a planning buffer, not a prediction of tax. Your actual position depends on profit, structure, allowable expenses and personal circumstances.
Worked hypothetical example
Hypothetical: A freelancer wants £42,000 personal pay, expects £6,500 of annual costs and allows £3,500 for pension or savings. A 25% contingency creates a £69,333 revenue target. After 25 days of leave and 35 days for sickness, admin and training, 200 working days remain. At 70% utilisation that becomes 140 billable days, producing a floor of about £495 per day or £71 per hour over seven billable hours.
How to use the three bands
- Lean: useful for a deliberately reduced scope or especially efficient repeat engagement, but risky as a default.
- Floor: the modelled minimum under the assumptions entered.
- Resilient: adds room for uncertainty, negotiation, overruns and reinvestment.
Do not quote a rate without defining what it buys. A fixed project price also needs scope, change control, client dependencies and the risk of rework. Revisit the inputs quarterly and after a meaningful change in cost or capacity.
What changes when fewer days are billable?
I would compare capacity scenarios before quoting from a single result. Keep the worked example's £69,333.33 revenue target and 200 available days, and change only utilisation. An automated check on 23 September 2026 reproduced the results below using this calculator's existing calculation function. Figures are rounded to the nearest pound; they are planning outputs, not market-rate measurements or a personal trading test.
| Utilisation | Billable days | Day rate | Hourly rate at seven hours |
|---|---|---|---|
| 50% | 100 | £693 | £99 |
| 70% | 140 | £495 | £71 |
| 80% | 160 | £433 | £62 |
Moving from 70% to 50% utilisation raises the required day rate by 40%, with the same revenue target. The practical choice is to raise the achievable price, reduce the target or costs, or improve saleable capacity. Increasing an input does not create demand.
A cost-based floor is my starting point for sustainability; a market comparison checks whether suitable buyers will pay it; a fixed project quote then needs explicit scope and risk allowance. Use all three for different decisions. Avoid counting the same admin time twice: the days removed first should be separate from the unused capacity represented by utilisation. The 260-weekday base is a simplified model; put relevant holidays into the leave allowance and adjust for your actual working pattern.
Sources
Initial source checks: 7 September 2026. Later checks are dated in the relevant passages. External information can change.
Spot something that needs correcting? See the corrections process.