Find out exactly what to charge as a freelancer. Enter your target income, working pattern and business costs to see the minimum day rate and hourly rate you need — and what that looks like after tax.
| Day Rate | Annual Revenue | After Tax & Costs | vs Target |
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The most common mistake new freelancers make is pricing at or near their employed hourly equivalent. This ignores everything an employer pays that employees never see: employer National Insurance, pension contributions, sick pay, holiday pay, training, equipment, and the overhead of non-billable time. A £35,000 employed salary is equivalent to approximately £300–£350/day freelance, not £175.
When you earn £35,000 as an employee, your employer pays significantly more. Employer NI at 13.8% on earnings above £5,000: approximately £4,200. Pension at 3%: £1,050. 28 days paid holiday + 8 bank holidays: effectively 15% of salary = £5,250. Training, equipment, IT: £500–£2,000. Total employer cost: approximately £48,000. As a freelancer, you absorb all of this plus non-billable overhead time.
New freelancers often assume 5 billable days per week. Reality: business development, proposals, admin, networking, invoicing, accounting and sick days consume 20–40% of available time. At 75% utilisation from 44 working weeks (4 weeks holiday): approximately 165 billable days. Price as if all 220 days are billable and you will underearn significantly.
A commonly cited rule of thumb: your freelance day rate should be 1.5–2 times your equivalent employed daily rate. On £35,000 (£134/day employed): freelance rate should be £200–£270/day at minimum. In specialist technical fields (software, data, legal, finance), the premium is typically 2–3x for equivalent expertise.
Formula: Day rate = (Target net income + business costs) / (1 - tax rate) / billable days. Billable days = working weeks × days per week × utilisation rate. Example: £45,000 target, £3,000 costs, 35% tax rate, 165 billable days: (£45,000 + £3,000) / 0.65 / 165 = approximately £447/day. Always price to your actual billable days, not total available days.
UK freelance day rates in 2026 by discipline: software developers £400–£700+, data engineers £450–£750, marketing consultants £250–£500, copywriters £200–£400, designers £200–£450, project managers £350–£600, finance contractors £400–£700, legal consultants £600–£1,200+. Rates vary significantly by specialisation, experience, sector and location. London typically commands 20–30% above national rates.
For income below approximately £30,000–£35,000 profit, sole trader (self-employed) is often simpler and adequate. Above this threshold, a limited company typically becomes more tax-efficient by enabling dividend extraction at 8.75% dividend tax instead of 20–40% income tax, and paying a minimum salary to preserve NI record. Corporation tax at 19–25% applies to company profits. Accountant advice is essential before choosing a structure.