Freelance Calculators
Setting your rate, quoting a project, and understanding your actual take-home pay as a freelancer requires different calculations than a salaried employee. Our freelance calculators handle all of them.
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Rates & Pricing
Hourly rate, project quote, and day rate calculators
Tax & Income
Self-employment tax, quarterly estimates, and net income
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Freelance Glossary — Key Terms Explained
- Billable Hours
- Hours you can charge clients for, as opposed to admin, business development, invoicing, and downtime. Most freelancers can realistically bill 60–75% of their working hours. Factor this into your rate calculation.
- Day Rate
- Freelance rate quoted per day rather than per hour. Typically 7–8× the hourly rate. Day rates are common in contracting (IT, finance, creative agencies) and provide more predictable income than hourly billing.
- IR35 (UK)
- UK tax legislation determining whether a contractor is an employee for tax purposes. If 'inside IR35', tax and NI is deducted as if you're an employee, significantly reducing take-home pay. Applies mainly to medium/large company clients.
- Limited Company (UK)
- Many UK freelancers operate via a limited company for tax efficiency — paying a small salary (at NI threshold) and taking the remainder as dividends, which are taxed at a lower rate than income. Less tax-efficient since IR35 reforms and dividend tax changes in 2022–2023.
- Quarterly Estimated Tax (US)
- Self-employed US taxpayers must pay estimated taxes quarterly to the IRS. Missing payments results in penalties. Estimated tax covers income tax and self-employment tax (15.3% on net earnings).
Frequently Asked Questions
How do I calculate my freelance hourly rate?
Start with your annual income target, divide by realistic billable hours. Example: target £60,000/year, work 48 weeks, 30 billable hours/week = 1,440 billable hours. Add 30% for taxes and expenses: £60,000 × 1.30 = £78,000. Hourly rate = £78,000 ÷ 1,440 = £54/hour. Round up to account for unpaid admin time.
What is a good freelance day rate in the UK?
UK day rates vary enormously by specialism. Software developers: £400–£900/day. UI/UX designers: £300–£700/day. Marketing consultants: £250–£600/day. Finance contractors: £400–£800/day. Junior/mid roles typically start at £250–£350/day. Senior specialists in-demand roles can exceed £1,000/day.
How much should I set aside for tax as a UK freelancer?
A safe rule of thumb: set aside 25–30% of income for tax. At £60,000 income: Income Tax ≈ £12,230, Class 4 NI ≈ £3,461, Class 2 NI ≈ £179. Total ≈ £15,870 (26%). Setting aside 30% gives you a safety buffer and covers any unexpected bills.
Should I use a limited company or be a sole trader in the UK?
Sole trader: simpler to set up and run. Pay income tax + NI on all profits. Better for income under ~£30,000. Limited company: more admin (accounts, corporation tax, company filings) but potentially more tax-efficient above £30,000 through salary + dividends. IR35 rules complicate this for single-client contractors.