How to calculate your freelance day rate, step by step

Your day rate is what the studio has to bring in over a year, divided by the days you can actually bill. Add the income you want to take home, the tax on it and what the studio costs to run, then divide by your billable days, not by every weekday in the year. In the example below, $63,000 to take home, $12,000 of costs and $27,000 of tax come to $102,000, and over 179 billable days that is $570 a day. The half-day and hourly rates, and the smallest project worth quoting, follow from that number.

The day rate in one line

(Take-home pay + studio costs + tax) ÷ billable days = day rate

Here is the whole example in one table. Every figure in it is an example, so replace each one with your own.

Line	How it’s worked out	Example
Income to take home	What you want to keep after tax	$63,000
Studio costs	A year of overheads	$12,000
Tax	30% of profit, set aside	$27,000
What the studio must bring in	The three added together	$102,000
Days you can bill	260 weekdays, less time off and admin	179
Day rate	$102,000 ÷ 179, rounded up	$570

The day-rate calculator in The Studio Kit runs the same sum with your own numbers: change one input and the rest move with it.

Start from the income you want to take home

Start from the life the studio has to pay for, not from what other freelancers charge; the market comes in at the end, as a check. The first number is the income you want to land in your personal account in a year, after tax.

If you’re leaving a job, its take-home pay is a fair first guess, but it leaves things out: an employer may have matched your retirement savings and paid most of your health insurance. Build the figure from:

• what you spend in a year: rent or mortgage, bills, food and the rest of your life;
• what you save, including for retirement;
• health insurance, if you now buy your own;
• a cushion for the slow months between projects.

The example uses $63,000. Put personal costs such as health insurance here, in the take-home figure, and keep the next list to the business, so nothing is counted twice.

Add what the studio costs to run

Overheads are what the studio pays whether or not a client is booked this month. They don’t belong to any one project, so every day you bill has to carry a share of them.

• Software: design apps, accounting, client management, email, cloud storage and backup
• Hardware: the computer, screen, tablet and camera, divided by the years you’ll keep them
• Insurance, such as professional liability
• An accountant or bookkeeper
• Your website, domain and email
• The business share of your phone and internet
• A studio or coworking desk, if you rent one
• Training, travel and marketing

The example uses $12,000 a year, or $1,000 a month. Work out yours from last year’s bank and card statements rather than from memory, because small subscriptions are easy to forget. If Creative Cloud is a large part of the software line, check which Adobe apps a one-person studio can replace before you price the subscription into every day you work.

Set tax aside on top

Tax is charged on profit: what the studio brings in, minus its costs. So the tax line grosses up your take-home pay, not your costs.

In the US, a sole proprietor, or an LLC taxed as one, pays self-employment tax as well as income tax. Self-employment tax is the Social Security and Medicare tax an employer would otherwise share with you: 15.3% in all, 12.4% for Social Security (up to a yearly limit) and 2.9% for Medicare, owed once your net earnings from self-employment reach $400. You pay both halves, and you can deduct the employer-equivalent portion when you work out your adjusted gross income. Federal income tax comes on top, and in most states, state income tax as well.

The example sets aside 30% of profit. To find the profit that leaves $63,000 after tax, divide by what remains once the tax share is out: $63,000 ÷ 0.70 = $90,000, of which $27,000 is tax. Thirty percent is an example, not your rate. Your real share depends on your income, your state, your deductions and your household, so ask an accountant or enrolled agent for a figure before you set the rate, not at tax time.

No employer withholds this tax for you, so the IRS expects it during the year. You generally have to make estimated tax payments if you expect to owe $1,000 or more when you file, worked out on Form 1040-ES and paid over four payment periods. Move the tax share of every payment into a separate account the day it arrives, and the money for each payment is already there.

Outside the US, the method is the same and only this line changes. In the UK, for example, income tax and National Insurance take the place of self-employment tax, and if you’re registered for VAT, it goes on your invoices on top of the rate.

Count the days you can bill

A year has 260 weekdays at most. Take out the days you won’t work and the days you’ll spend on the studio rather than for clients, and what’s left is what the year’s income has to come from.

1. Start with 260 weekdays.
2. Take out 11 public holidays, 20 vacation days and five sick days: 224 are left.
3. Take out admin: quoting, invoicing, bookkeeping, email and finding the next client. At one day in five, 179 are left.

These are the same days as the full table in how to plan paid time off as a freelancer, which explains each line, so the two sums agree. Choose your time off first; the rate follows from it, not the other way around.

The admin share is the guess most worth replacing with a measurement. For a month, run a free time tracker such as Clockify with one project for client work and one for everything else, then use the share you measured. The Tools page lists other trackers that suit a single seat.

If you’ve freelanced for a year or more, also count the days you actually invoiced last year. If that’s well below 179, the quiet gaps between projects are part of your year, so don’t price as if they won’t happen.

Divide: day, half-day and hourly rates

$102,000 ÷ 179 = $569.83, so the day rate is $570. Round up, never down, because rounding down takes the difference out of your take-home pay. As a check, 179 days at $570 come to $102,030.

The time-off article stopped at $503 a day: $90,000 before tax, spread over the same 179 days. The $67 difference is the studio’s costs.

Half-day rate

Half of $570 is $285. That’s fair if you can sell the other half of the day. If a half-day booking usually means the rest of the day goes unbilled, price a half day at more than half, say $350, and let the full day be the better deal.

Hourly rate

Divide the day rate by the hours of client work in a billed day, not the hours you spend at your desk. At seven hours, $570 ÷ 7 is $81.43, so $82, or $85 rounded up to the next five. At six focused hours it’s $95. Use the hourly rate for small, open-ended work such as edits and support, and the day rate for projects.

The smallest project worth quoting

Every project costs you unbilled time, whatever its size: the discovery call, the proposal, the contract, onboarding, the invoices and sometimes the chasing. Say that comes to half a day per project. Your day rate pays for 45 admin days against 179 billed ones, about one admin day for every four you bill. So a project that carries half a day of admin needs at least two billed days to pay for it: in the example, a minimum project of $1,140.

For anything smaller, there are three honest answers: quote the minimum anyway, fold the job into other work for the same client, or pass it to someone who takes small jobs. Turning down the $300 job is part of what keeps the rate at $570.

Check it against the market, then quote above the floor

$570 is your floor: the least the studio can charge and still pay you, its costs and its tax with the time off you planned. It isn’t your price. What clients in your field pay is a check on that number, not the place it comes from.

For the check, ask freelancers you trust in your discipline what they charge, listen to the budgets clients name, and read a professional body’s guide, such as the Graphic Artists Guild’s Handbook: Pricing & Ethical Guidelines, whose 17th edition (November 2025) carries pricing benchmarks and salary data across creative disciplines.

• If the market pays above your floor, quote above it. The floor is what the studio needs; the price can reflect what the work is worth to the client, from the usage they want to the deadline they set.
• If the market pays below your floor, don’t fix it by quietly deleting your vacation or the tax line. Change what you control: lower costs, less admin through templates and a client-management app, or clients who pay for the work, such as larger businesses or a niche that values it.

Then turn the rate into quotes. Estimate the days a project will take, multiply by the day rate and put a project fee in the proposal, not the rate itself; how to write a freelance proposal clients say yes to covers the rest. For more on rates, quotes and getting paid, see Pricing & Money.

Tip: redo the sum every January, and whenever your costs or your time off change. When a client asks for a discount, you’ll know exactly which line it comes out of.