How DayRate works

Most rate calculators give you a number with no working. DayRate shows every step, because the only rate you can defend in a negotiation is one you understand.

The formula

You start from the income you actually want, add back everything an employer used to cover, add a margin for risk, then divide by the days you can realistically bill. Here is what each part means.

Billable days, not calendar days

A year has about 260 weekdays. Take off holiday, public holidays and sick days and you’re nearer 220. Then knock off the admin, sales calls, proposals, learning and gaps between contracts — the work you don’t get paid for. Most freelancers bill around 200 days a year, not 250. Our default assumes 5 weeks off, public holidays, 5 sick days and 90% utilisation, which lands at roughly 200 billable days.

The costs an employer used to cover

• Overheads (default 20%) — insurance, software, equipment, accounting, a workspace and marketing. Beginners assume 5–10%; the real figure is usually 15–30%.
• Pension (default 10%) — no employer is contributing any more, so you fund it from the rate.
• Profit / buffer margin (default 15%) — for quiet periods, late payers, equipment and growth. Without it you have a job, not a business.
• Employer tax — for UK contracts caught by IR35, employer national insurance (≈15% from April 2025) comes off the top, so the rate is grossed up to compensate.

A worked example

You want £50,000 a year, working as a sole trader. Add 20% overheads (£10,000) and 10% pension (£5,000) to reach £65,000. Add a 15% buffer (£9,750) and you need to bill £74,750. Over ~200 billable days that’s about £375 a day (≈£50/hour). Your break-even — before any profit — is about £325 a day. Below that, you’re working at a loss.

Where the benchmarks come from

Every market benchmark is derived from public, official data and shown with its source and date. Where a country only publishes employed salaries, we convert them to an equivalent freelance day rate using the same methodology above — and we label it as derived. We don’t pretend to have live market rates; we give you defensible, dated estimates.

• Annual Survey of Hours and Earnings (ASHE), occupation (4-digit SOC 2020) — Office for National Statistics (2024)
• Contractor day-rate medians by role — IT Jobs Watch (2026)
• Occupational Employment and Wage Statistics (OEWS), national — U.S. Bureau of Labor Statistics (2024)
• Wage data by occupation (NOC) — Government of Canada — Job Bank / Statistics Canada (2024)
• Employee earnings by occupation — Australian Bureau of Statistics (2024)
• Earnings and labour costs — Central Statistics Office (Ireland) (2024)
• Earnings statistics by occupation — Statistisches Bundesamt (Destatis) (2024)
• Wages and earnings statistics — INSEE (2024)
• Earnings statistics — Centraal Bureau voor de Statistiek (CBS) (2024)

DayRate gives estimates to help you set a fair rate. It is not financial, tax or legal advice — confirm your tax position with a qualified accountant.