Why is the freelance rate higher than an employee hourly rate?

Freelancers must cover tax, expenses, holidays, sick days, pension, and admin time — all of which an employer typically covers.

What are billable hours?

Hours you can actually charge clients for. Typically 5–6 hours/day since admin, marketing, and breaks aren't billable.

Yes — include software, equipment, insurance, accounting, co-working space, and any other business costs.

Use your effective tax rate. In the UK, basic rate is 20%, higher is 40%. Include National Insurance if applicable.

Calculate your ideal freelance hourly and day rate based on target income, expenses, tax, holidays, and billable hours.

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Enter your desired annual income, business expenses, and time off to calculate the freelance rate you need to charge.

Target Annual Income (£)

Annual Expenses (£)

Effective Tax Rate (%)

Holiday Days / Year

Sick Days / Year

Billable Hours / Day

1

Enter your target annual take-home income

2

Add annual business expenses

3

Set your tax rate, holidays, and billable hours per day

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