Example result based on the prefilled values.
Hourly Rate
£45.14
Day Rate
£361.11
Total Billable Hours
1,440.00
Continue your plan
Useful next calculations
Rates & sources
UK company rates (Corporation Tax, VAT, payroll NI) as published by HMRC and Companies House.
Source: HMRC — Running a business — check the linked guidance and any live quote before acting.
When to use this calculator
- Before pricing a job, setting margin targets, or reviewing hiring costs.
- When you want to test sensitivity around volume, VAT, markup, or overhead changes.
- When you need a practical estimate before committing to a budget or proposal.
- When you are modelling break-even volume and want to see how it shifts as overheads or prices change.
- When you are preparing a quote and need to verify that the margin holds after materials, labour, and VAT are accounted for.
A realistic UK planning example
Use these sample inputs as a quick scenario test, then change one variable at a time to compare outcomes.
Desired Annual Income (£)
£35,000
Billable Hours Per Week
40 hours
Working Weeks Per Year
25 years
Annual Expenses (£)
5000
After entering these figures, review hourly rate, day rate and total billable hours together rather than in isolation — each metric tells a different part of the story. Then rerun the tool with one input adjusted to see which variable has the biggest effect on all three outputs before you settle on a plan.
How to read your results
Hourly Rate
Use this metric to compare scenarios side by side and understand how changes in the key inputs drive the final outcome. If the figure surprises you, isolate one variable at a time and rerun the calculation to identify which assumption is responsible.
Day Rate
Use this metric to compare scenarios side by side and understand how changes in the key inputs drive the final outcome. If the figure surprises you, isolate one variable at a time and rerun the calculation to identify which assumption is responsible.
Total Billable Hours
This is the headline outcome of the calculation, but it is most useful when read alongside the supporting metrics below it rather than in isolation. Try changing one input at a time and watching how this total moves to understand which driver has the biggest impact.
Method & assumptionsAuthoritative sources
This calculator estimates the hourly and eight-hour day rate needed to cover your target annual income and annual expenses across the billable hours and working weeks you enter. It is designed for pricing freelance or contract work, where not every working hour can be billed to a client.
All results are gross, before tax, social contributions and business expenses not included in the annual-expenses input. It does not apply country-specific employment or contractor rules. Allow for unpaid administration, leave and gaps between projects, then check the result against your local tax obligations and actual utilisation.
Common mistakes
- !Using optimistic assumptions without testing a more cautious scenario as well.
- !Comparing outputs from different tools without checking that the inputs match.
- !Treating the result as a final quote instead of a planning estimate.
- !Forgetting to include employer National Insurance contributions when modelling the true cost of a new hire.
- !Using revenue figures in place of gross profit when calculating margin percentage, which produces a misleadingly high result.
What to do next
- Try at least one more scenario with a lower price or higher cost so you can see the margin floor.
- Use the related calculators below to cross-check VAT, payroll, or break-even figures from another angle.
- Open one of the linked guides if you need more context before you finalise a quote or budget.
- If the margin is tighter than expected, identify which single input has the biggest impact and focus any negotiation there first.
- Keep a record of the assumptions behind this estimate so you can revisit and update it when costs or volumes change.
Frequently asked
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