UK Freelance Rate Calculator

The calculator works backwards. You tell it what you want to keep after tax, and it tells you what you must charge. Required revenue = desired take-home ÷ (1 − tax rate) + business expenses, because tax falls on your profit — revenue minus allowable expenses — not on your revenue. That revenue is then spread over the hours you can genuinely invoice: billable hours per week × working weeks (52 minus your unpaid weeks off). The day rate assumes an eight-hour day.

The division by real hours is the part the familiar salary ÷ 2,080 shortcut gets wrong, twice. It assumes every hour is billable, when sales, proposals, admin and bookkeeping pay nothing — the default here is 25 billable hours a week, not 40. And it assumes 52 earning weeks, when holiday, bank holidays and sick days are unpaid — six weeks off leaves 46. On the defaults, that turns 2,080 employee hours into 1,150 billable ones.

On the default numbers — £45,000 of take-home, £5,000 of expenses, a 26% tax rate and 25 billable hours across 46 weeks — the arithmetic runs like this.

The naive figure is £45,000 ÷ 2,080 = £21.63 an hour. The honest one is £57.23 — 165% higher. Nothing in the gap is margin or ambition; it is tax, expenses, unbillable hours and unpaid weeks, priced in. The calculator also reports the weekly revenue target — £1,430.67, the exact hourly rate times 25 billable hours.

The default tax rate is not a guess. For the 2026/27 tax year, a sole trader in England, Wales or Northern Ireland pays income tax at 0% on the first £12,570 of profit (the personal allowance), 20% from £12,571 to £50,270, 40% from £50,271 to £125,140, and 45% above that; the personal allowance also tapers away by £1 for every £2 of income over £100,000, disappearing at £125,140. On top sits Class 4 National Insurance: 6% on profits between £12,570 and £50,270 and 2% above. Class 4 is not deductible against income tax — both are charged on the same profit figure. Add the two and every extra pound of profit in the basic band loses 26p: 20% income tax plus 6% Class 4. That 26% is the calculator's default.

There is no weekly National Insurance charge to add. Compulsory Class 2 was abolished from 6 April 2024; in 2026/27, profits at or above the £7,105 Small Profits Threshold are treated as having paid Class 2, preserving State Pension and benefit entitlement at no charge, and only freelancers below that line might choose voluntary Class 2 at £3.65 a week.

Scottish income tax bands differ — the table above applies to England, Wales and Northern Ireland — though Class 4 National Insurance is identical UK-wide, so a Scottish freelancer rebuilds only the income-tax side. The personal allowance and the £50,270 and £125,140 thresholds are frozen until 6 April 2031, a freeze Autumn Budget 2025 extended; the Small Profits Threshold, by contrast, is uprated each year. Band edges are therefore stable for forward planning, but rates can change at any Budget, so check the tax year on any figure before relying on it.

The 26% default is a marginal rate — what the next pound of basic-band profit loses. The box actually wants your effective rate: total income tax plus Class 4 as a percentage of your whole profit. The effective rate is always lower than the marginal one, because the first £12,570 of profit is taxed at nothing and every pound up to £50,270 escapes the higher rates.

Compute it from the bands. At £50,000 of profit in 2026/27, the personal allowance takes the first £12,570 tax-free; income tax is 20% of the remaining £37,430, which is £7,486; Class 4 is 6% of the same £37,430, which is £2,245.80. Total: £9,731.80 — 19.5% of the £50,000, even though the marginal rate throughout the band was 26%.

The same method on the default scenario's implied profit of £60,810.81 gives £14,229.14 of tax and NI — an effective 23.4%, against the 26% the calculator assumes. The default is deliberately cautious: pricing at the marginal rate builds in a buffer, and unplanned extra income is taxed at the margin, not the average. To be exact instead, run your expected profit through the band table above, divide the tax by the profit, and type that percentage into the box.

Self Assessment does not collect tax monthly, and its schedule ambushes first-year freelancers. Once your annual bill passes £1,000, HMRC requires payments on account: two instalments, each half of the previous year's bill, due by midnight on 31 January and 31 July. They include Class 4 National Insurance (student loan repayments and capital gains tax do not join them — those land in the balancing payment), and they are skipped only if last year's bill was under £1,000 or more than 80% of the tax you owe was collected at source, through a tax code for example.

The cliff comes in the first profitable year. By 31 January you owe the full balancing payment for the year just gone plus the first 50% instalment towards the current one — 150% of a year's bill in a single payment — with another 50% due on 31 July. On the £50,000-profit example above, the £9,731.80 bill becomes £14,597.70 on 31 January and £4,865.90 on 31 July: £19,463.60 inside six months. The rate the calculator returns funds the tax itself; the timing is yours to plan for. Setting aside your effective rate from every invoice, from the first invoice, is the standard defence.

The calculator prices a sole trader. A limited company runs on different arithmetic — corporation tax on company profits, then income tax on salary and dividend tax on the dividends you extract, with dividend rates up 2 percentage points from April 2026 — and none of it maps onto a single combined rate box. Compare the two structures with an accountant, not this page.

VAT is a separate test on a different number. Registration becomes compulsory when VAT-taxable turnover — what you invoice, not what you keep — passes £90,000 in any rolling 12-month period, a threshold in force since 1 April 2024 and unchanged by the 2025 Budgets; registering below it is voluntary. The default scenario's £65,810.81 of revenue is clear, but the margin is thinner than it looks: £90,000 spread over 1,150 billable hours is £78.26 an hour, so sustaining much above that for a rolling year takes turnover past the threshold. If your rate is heading there, the UK VAT calculator covers adding and extracting VAT at the 20% standard rate.

Two small reliefs affect the expenses box. The £1,000 trading allowance lets you deduct a flat £1,000 instead of actual expenses — either the allowance or actual costs, never both — which only helps if your real costs are lower. And simplified expenses offer flat rates for exactly three things — business vehicle mileage, working from home, and living at your business premises — everything else must be claimed at actual cost.

Finally, the result is a planning floor, not tax advice. The model assumes every expense is allowable and nothing else moves the bill; a real Self Assessment has more moving parts, so confirm your position with an accountant before fixing rates into a contract.