Almost every freelancer sets their first day rate the same way. Take the salary you used to earn, or would like to earn, divide by 260 working days, round up a little for luck. Sixty thousand becomes about £230 a day. It feels defensible, it is easy to say out loud, and it is roughly a third too low. Worse, the shortfall does not show up for a year or so, by which point the number is anchored with every client on your books and every conversation about raising it starts from the wrong place.
The problem is not a lack of ambition. It is that 260 is a fiction, and a salary is not the same thing as what a business costs to run.
The 260-day mistake
There are around 260 weekdays in a year. You will not sell 260 of them, and you should not be trying to.
Start subtracting. Eight bank holidays in England and Wales. Whatever holiday you actually intend to take — if you would not have accepted fewer than twenty days from an employer, do not quietly accept fewer from yourself. Then a few days lost to illness, because there is no statutory sick pay when you work for yourself and leaving them out of the maths does not make you well. That is already down to around 227 days.
Then the harder subtraction: the days you work but cannot invoice. Pitching, quoting, invoicing, chasing the invoices, bookkeeping, marketing, your own training, and the coffees that turn into work six months later. For an established freelancer with a steady book, somewhere between 65% and 70% of available days end up billable. In the first year or two, 50% is the honest figure. On 227 available days at 65%, you have roughly 148 days to sell.
That is the number your rate has to divide into. Not 260.
A day rate is not what your time is worth. It is what your year has to earn, divided by the days you can actually sell.
Add back everything an employer used to pay for
A salary is the visible part of a much larger cost. Go freelance and the invisible part becomes yours, all of it, on the same day.
Employer pension contributions. Employer National Insurance. Paid holiday and paid sick leave. The laptop, the phone, the software licences. Professional indemnity and public liability cover. An accountant. Training, conferences and the subscriptions that keep you current. The equipment that breaks in February. Add these up honestly rather than optimistically — most solo freelancers land somewhere between £3,000 and £8,000 a year of direct business costs before any pension contribution — and treat pension as a cost of the year, not as something you will get to once things settle down.
Then set what you want the business to produce as profit before tax. Do not set it at your old salary. Set it at your old salary plus the employer costs you have just inherited, because that is what you were actually being paid.
Do the arithmetic
Illustrative figures, but the shape is what matters.
A freelance designer wants £55,000 of profit before tax. Direct costs come to £4,800 a year: insurance, accountant, software, phone, a laptop spread over three years and a small training budget. Available days after holiday, bank holidays and a realistic allowance for illness: 227. Billable at 65%: 148 days.
(£55,000 + £4,800) ÷ 148 = £404 a day. Call it £400, or £425 if you would rather the rounding worked in your favour for once.
Now sense-check what that actually leaves. On £55,000 of profit in 2026/27, the personal allowance is £12,570 and the higher rate threshold is £50,270. Income tax is 20% on £37,700, which is £7,540, plus 40% on the £4,730 above the threshold, which is £1,892 — £9,432 in total. Class 4 National Insurance is 6% on £37,700, or £2,262, plus 2% on the £4,730 above the upper limit, or £95 — £2,357. Total tax and National Insurance around £11,789, leaving roughly £43,200 in hand before any pension contribution, which is deductible and would reduce the bill.
So £404 a day produces about £43,200 to live on. That is the real exchange rate between a headline number and a life, and it is why £230 a day was never going to work.
Check the market afterwards, not instead
Now — and only now — look at what other people doing your work charge. Job boards, recruiter rate cards, and better than either, asking two or three freelancers you trust what they are actually getting rather than what they advertise.
If your calculated rate sits well above the market, the answer is not to cut it back to the market and swallow the difference in silence. It is to change something structural: fix your utilisation so you sell more days, cut the cost base, specialise into work that pays better, or lower your profit target deliberately rather than by accident. If your calculated rate sits below the market, put it up. You have just discovered you were about to leave money on the table for no reason.
When a day rate is the wrong unit
A day rate prices your time, which means that the better and faster you get at the work, the less you earn for doing it. For repeatable, well-defined jobs — a brand identity, a website, a set of accounts — price the outcome instead. Pricing for profit covers the mechanics of that, and how to price a monthly retainer covers the version where the client is really buying ongoing availability rather than a defined piece of work.
Keep the day rate for open-ended work, for cover, and as the anchor you quote everything else from. Use project pricing wherever you can define what 'done' means.
Putting it up
Review the rate once a year on a fixed date you have written down, and apply the new number to new clients first. Existing clients get notice — a month is decent — and a reason that is about the work rather than about your costs. Nobody has ever accepted a price rise because their supplier's insurance went up.
One last note if you are still in side-hustle territory. Gross trading income of £1,000 or less in a tax year is covered by the trading allowance and generally does not need reporting. Above that, register for Self Assessment. The rate you set at the kitchen table this month is the one you will still be arguing about in three years, so set it properly now, while nobody is watching and nothing is at stake.
Common questions
How many hours is a day when I quote a day rate?
Say it out loud before the work starts, because the client is assuming something and it is rarely the same as what you are assuming. Seven or seven and a half hours is the common standard, matching a typical employed day less lunch. Whatever you choose, write it into the quote alongside what happens when a day runs over: either it stops at the agreed hours, or overtime is charged pro rata, or the day rolls into the next booked day. Ambiguity here always resolves in the client's favour, because they are the one who noticed the deadline. A single line in the quote removes the entire argument.
Should I charge for travel time and travel costs?
Charge for both, and separate them. Travel expenses — mileage, rail fares, parking, an overnight stay — are recharged at cost and should be agreed in advance with a rough ceiling so nobody is surprised by the invoice. Travel time is different, because it is time you cannot sell to anyone else. Common practice is to charge half your day rate for travel days, or to include a defined radius in the rate and charge beyond it. The unpopular option is absorbing all of it silently, which works fine until a client two hours away books you for six days and your effective rate quietly collapses.
Do I have to tell a client my day rate if they ask?
You do not have to lead with it, but refusing to give a number reads as either evasive or expensive, and both cost you work. A better move is to answer with the number and immediately reframe: give the day rate, then say what you would normally recommend for a job of this shape, which is often a project price. That keeps you credible on price while moving the conversation away from time-based buying. Where a client is clearly rate-shopping across several freelancers, giving a straight answer early saves you from writing a proposal for work that was never going to be yours.
Should I discount for a long booking?
A modest discount for a long, committed booking is reasonable, because it removes weeks of selling and cash-flow uncertainty in one go. Ten per cent for a month or more is a common landing point. Two conditions make it safe. First, it has to be genuinely committed — invoiced monthly in advance or with a proper notice period — rather than a loose intention that evaporates in week two. Second, keep the discount as a stated reduction from your standard rate rather than rewriting your rate, so the number you return to when the booking ends is not in doubt. Undated discounts have a habit of becoming permanent.
