Freelance Day Rate Calculator
$925.92 per day
Charge this to take home $100,000.00 a year, working 8-hour days at 30 billable hours a week.
- Equivalent hourly rate
- $115.74
- Revenue you need to bill
- $166,666.67
- Billable hours a year
- 1,440
How this is calculated
A day rate is not simply your hourly rate times eight, because the hourly rate most freelancers start from is already wrong. Dividing a target salary by 2,080 hours assumes every working hour is billable, that you carry no business costs, and that somebody else pays your tax. None of those hold. This calculator works backwards from the number you actually care about, which is what you want to keep at the end of the year. It grosses that figure up by your tax rate and again by your overhead rate to find the revenue you must genuinely bill, divides it across your real annual billable hours to get an hourly rate, then multiplies by the length of your working day. Changing the day length changes the day rate but not the hourly rate, which is the point: a shorter day does not make your time cheaper, it just means fewer hours in each day you sell.
Worked example
Thirty billable hours across forty-eight weeks is 1,440 billable hours a year. Keeping $100,000 after 25% tax and 20% costs means billing $166,666.67 of revenue, which across 1,440 hours is $115.74 an hour. An eight-hour day is therefore $925.92 — a long way from the $384.62 a day you would get by dividing $100,000 by 260 working days.
Inputs: 100,000 target income, 30 billable hours a week, 48 working weeks, 8-hour days, 20% business costs, 25% tax
Result: $925.92 a day, from an hourly rate of $115.74
What this assumes
- Business costs and tax are entered as flat percentages of revenue, which is an estimate rather than a tax calculation.
- Every billable hour you enter is actually billed and actually paid.
- A working day is whatever length you enter; the default of eight hours is a convention, not a rule.
Questions
- Should I quote a day rate or an hourly rate?
- Day rates suit work booked in whole days, such as consulting or on-site work, and they stop clients querying individual hours. Hourly rates suit work that arrives in small pieces. The underlying number is the same either way, which is why this tool shows you both.
- Why is my day rate not just eight times my old hourly rate?
- Because the hourly rate you started from probably assumed every hour was billable. Once you account for unbillable time, business costs and tax, the real hourly figure rises, and the day rate rises with it.
- Should I discount for a long booking?
- That is a commercial decision rather than a calculation, but do it deliberately. Work out the rate you need first, then decide what discount a guaranteed month of work is worth to you, rather than discovering afterwards that a long booking was priced below cost.