Free Freelance Rate Calculator — Hourly and Day Rate
Start from the income you want and the cost of running the business, and work back to the hourly rate and day rate that actually get you there. The part most calculators skip is utilisation: you cannot bill every hour you work, and pricing as if you could is how freelancers end up busy and broke. Your numbers stay in your browser and are never sent to Instilus.
How the rate formula works
Hourly rate = (target income + business costs) × (1 + profit buffer) ÷ billable hours a year
Billable hours a year = weeks worked × days per week × hours per day × utilisation
The numerator is easy and almost everyone gets it right. The denominator is where rates go wrong. An employed year is often quoted as 2,080 hours, but a freelance year is shorter (you take unpaid holiday) and only part of it is billable at all: proposals, invoicing, marketing, admin and your own learning are hours you work and nobody pays for.
- Working days a year = weeks worked × days per week
- Billable days a year = working days × utilisation
- Day rate = required revenue ÷ billable days, which is the same as the hourly rate × hours per day
- Required revenue = (target income + business costs) × (1 + profit buffer)
Worked example
A freelancer wants to pay herself 45,000 a year before tax. Software, insurance, her accountant and equipment come to 9,000. She works 45 weeks (taking 7 weeks of holiday and allowing for sick days), 5 days a week, 8 hours a day, and expects 60% of that time to be billable.
| Revenue to invoice | 45,000 + 9,000 = 54,000 |
| Working days a year | 45 × 5 = 225 |
| Billable days a year | 225 × 60% = 135 |
| Billable hours a year | 135 × 8 = 1,080 |
| Hourly rate | 54,000 ÷ 1,080 = 50.00 |
| Day rate | 54,000 ÷ 135 = 400.00 |
Divide 54,000 by the 1,800 hours she actually works instead and the answer is 30.00 an hour — a rate that misses her target by 40% because it charges clients for the 720 hours a year they never buy. Add a 10% profit buffer and the honest answer moves to 55.00 an hour, or 440.00 a day.
Edge cases this calculator handles
- Zero utilisation. With no billable time there are no hours to spread costs over and no rate exists. The calculator says so rather than returning infinity.
- Utilisation above 100%. Refused. If you are billing more hours than you work, the hours-per-day figure is the one that is wrong.
- More than 52 weeks, 7 days or 24 hours. Refused, with the reason, instead of quietly producing a rate built on a year that does not exist.
- Part-time and compressed weeks. Days per week and hours per day take decimals, so a 3-day week or a 6.5-hour day works.
- No profit buffer. Leave it blank and the rate covers income and costs exactly, with nothing spare for a quiet month.
Frequently asked questions
How do you calculate a freelance hourly rate?
Add the income you want to the cost of running the business, add any profit buffer, then divide by the hours a client will actually pay for in a year. Billable hours are weeks worked × days per week × hours per day × utilisation, not every hour you are at your desk.
Why can I not just divide my old salary by 2,080 hours?
Two reasons. An employed salary hides the employer’s costs — pension, employer National Insurance, holiday pay, equipment, software, sick pay — which you now pay yourself. And 2,080 assumes every working hour is billable. At a realistic 60% utilisation, dividing by 2,080 sets a rate roughly 40% below what you need before either of those is counted.
What is utilisation, and what figure should I use?
Utilisation is the share of your working hours a client pays for. The rest goes on selling, proposals, invoicing, admin, and your own learning. Solo freelancers commonly plan on 50–70%, and it is lower in the first year while you are still finding clients. It is a planning assumption: track what it actually turns out to be and put the real number back in.
How is a day rate worked out from an hourly rate?
A day rate is the hourly rate times the hours in your working day, because a day a client buys is a day they have booked in full. This calculator divides the same required revenue by billable days rather than billable hours, which gives the identical answer and keeps the two consistent.
Does this figure include tax?
No. The result is revenue your business needs to invoice. Income tax, National Insurance, corporation tax and VAT all come out of it, and what you owe depends on your own circumstances and where you are — set that aside separately and ask an accountant. Enter your target income as a figure before tax.
Should I add a profit buffer?
A buffer covers what the plan will not: a quiet month, a client who pays late, a machine that dies, and money to reinvest. Something in the 10–20% range is a common planning choice. Leave it blank and the rate covers your income and costs exactly, with nothing spare.
What counts as an annual business cost?
Everything you pay to be in business regardless of how much you bill: software subscriptions, professional indemnity and public liability insurance, accountant’s fees, equipment and its replacement, a co-working desk, training, professional memberships and your website. Do not include your own pay — that is the target income field.