Self-employed day rate calculator

How do you work out a day rate when you're self-employed?

Start with what you want to take home, add the Income Tax and National Insurance on the profit, add your yearly business costs, then divide by the days you can actually bill. Holidays, bank holidays, sick days and admin all come off first, so the rate has to earn a full year's money in fewer days.

Day rate = (take-home + Income Tax + Class 4 NI + business costs) ÷ billable days

Because tax depends on profit, the calculator works backwards: it finds the profit that leaves exactly your take-home after Income Tax and Class 4 National Insurance, then adds your costs to get the turnover you need.

Worked example: £35,000 take-home

Take-home of £35,000.00, business costs of £9,000.00, 5 days a week, 4 weeks' holiday and 8 bank holidays, living in England. That's 232 working days. To take home £35,000.00 you need a profit of £42,880.81, which carries £6,062.16 Income Tax and £1,818.65 Class 4 National Insurance. Add the costs and the turnover is £51,880.81, so the day rate is £223.62.

Allow 5 sick days, 2 training days and 2 unbillable days a month as well, and the billable days drop to 201. The same take-home now needs £258.11 a day.

How many days a year can you actually bill?

Fewer than you'd think. Five days a week is 260 days a year. Take off four weeks' holiday, eight bank holidays, a few sick and training days and two days a month for quoting and admin, and you're left with about 200 billable days. That's the number your rate has to be built on.

The calculator starts with these defaults. Change any of them to match how you work:

• 5 days a week, 8 hours a day, over a 52-week year.
• 4 weeks' holiday, plus 8 bank holidays (England and Wales had 8 in 2026).
• 5 sick days and 2 training days a year.
• 2 unbillable days a month for pricing visits, quotes, paperwork and collecting materials (24 a year).

What Income Tax and National Insurance does a sole trader pay in 2026/27?

In England, Wales and Northern Ireland: no Income Tax on the first £12,570, then 20% up to £50,270, 40% up to £125,140 and 45% above. Class 4 National Insurance is 6% on profits between £12,570 and £50,270, and 2% above that. Class 2 isn't payable once profits reach £7,105.

The Personal Allowance goes down by £1 for every £2 of income over £100,000, so it's gone completely at £125,140. The calculator includes that. Class 2 National Insurance is voluntary (£3.65 a week) if your profits are under £7,105, so it isn't included either way.

How does it work in Scotland?

Scotland sets its own Income Tax bands, so choose Scotland in the calculator. For 2026/27 the rates are 19%, 20%, 21%, 42%, 45% and 48%, with the same £12,570 Personal Allowance. National Insurance is the same across the UK, so Class 4 is worked out exactly as it is in England.

You pay Scottish Income Tax if you live in Scotland. The calculator applies these bands to your taxable profit after the Personal Allowance, and tapers the allowance above £100,000 in the same way.

What business costs should you include?

Everything the business pays for over a year that isn't your own wages: van lease or finance, fuel, repairs, insurance, tools, phone, software, accountant, workwear, trade scheme fees, training and advertising. Use last year's bank statements if you have them. Materials you charge back to customers don't count, because they're priced into each job.

Open "Itemise your costs" in the calculator to go through them one at a time. The calculator treats every cost you enter as a business expense that reduces your taxable profit; some costs, such as the personal use of a van, may only count in part.

What does this estimate leave out?

It's an estimate, not tax advice. It assumes the business profit is your only income and ignores pension contributions, student loan repayments, other reliefs, payments on account and VAT. Your real tax bill depends on your full return, so check big decisions with an accountant or HMRC.

If the turnover it shows is over £90,000 for any 12 months, you'd have to register for VAT, and the day rate here is before VAT. Once you know your rate, use it in the job price calculator and our guide to pricing a job.