Convert your target annual income to a freelance day rate — or check what annual equivalent a day rate represents after tax.
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How This Works
Day rate calculation: determine the gross revenue needed (take-home income grossed up for tax and NI), then divide by billable days. Ltd company contractors typically multiply target take-home by ~1.35 to get required gross. Sole traders multiply by ~1.45 (higher tax burden). Remember to account for non-billable days: holidays, sick days, marketing time, admin, CPD.
Most experienced UK freelancers plan for 200–220 billable days per year. That accounts for: 25 days holiday, 8 bank holidays, ~10 days sick/admin buffer, and 10–20 non-billable days for business development, proposals, networking and CPD. New freelancers should initially plan for 180 days while building a client base. Overestimating billable days in your rate calculation is a common mistake that leads to lower real income than expected.