The hourly rate that covers the income you want, your business costs and your tax.
Minimum hourly rate (excl. VAT)
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Enter the income you want and your billable hours to see the rate.
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Enter the income you want, your business costs, what to set aside for tax and National Insurance, and the hours you can bill. You get the minimum hourly rate to charge, excluding VAT, the turnover you need over the year and every step of the working.
Enter it per month or per year: what you want for yourself once your business costs are paid. Add your business costs for the same period, such as software, equipment, insurance, an accountant, workspace and travel.
As a sole trader you pay Income Tax and Class 4 National Insurance on your profit, which is your turnover minus your allowable costs, in bands rather than at one flat rate. Choose 'Set aside %' and enter a percentage of profit to cover them: the calculator grosses your income up so that, once that share of profit is put aside, the income you want is left. Choose 'None' to work out a rate before tax.
No freelancer bills every hour they work: finding clients, quoting, admin and training all take time. Enter the hours you can actually invoice each week, then the weeks you will not work in the year: holiday, bank holidays, illness and training. The calculator counts 52 weeks in a year.
The turnover is rounded to the nearest penny and the hourly rate is rounded up to the next penny, so that charging it reaches the income you want. Copy the workings in one click, export them as a CSV file or save them to Priostack.
With a set-aside on profit: profit = income ÷ (1 − percentage), then turnover = profit + business costs.
With no set-aside: turnover = income + business costs.
Billable hours a year = (52 − weeks off) × billable hours a week.
Hourly rate = turnover ÷ billable hours a year.
You want £40,000 a year, have £4,000 of business costs and set aside 20% of profit. Your profit must be £40,000.00 ÷ (1 − 20%) = £50,000.00, of which £10,000.00 is set aside, so your turnover must reach £54,000.00. Billing 25 hours a week with 7 weeks off gives 1,125 billable hours, and a minimum rate of £48.00 an hour. For comparison, £50,000 of profit attracts £9,731.80 of Income Tax and Class 4 National Insurance in the 2026 to 2027 tax year in England, Wales and Northern Ireland, if it is your only income and you have the standard Personal Allowance.
Add the income you want for the year, your business costs and what you need to set aside for tax, then divide by the hours you can bill in a year. Do not just divide an employee's salary by 37.5 hours a week: you will not bill every hour, and nobody pays you for your holidays.
It depends on your profit. In the 2026 to 2027 tax year, in England, Wales and Northern Ireland, you pay no Income Tax on the first £12,570 (the Personal Allowance), then 20% up to £50,270, 40% up to £125,140 and 45% above; the allowance shrinks once income passes £100,000. Class 4 National Insurance is 6% of profits from £12,570 to £50,270 and 2% above. On £50,000 of profit, that is £7,486.00 of Income Tax and £2,245.80 of National Insurance, £9,731.80 in all, or about 19.5% of profit.
For Income Tax, yes: Scotland has its own six bands, from a 19% starter rate to a 48% top rate in 2026 to 2027, so the same profit can need a different set-aside. Class 4 National Insurance is the same across the UK.
To profit, for UK tax: Income Tax and Class 4 National Insurance are charged on what is left after allowable business costs. Choose turnover only for a charge that really is a share of your sales.
The calculator counts 7 by default. As a guide, almost all workers are entitled to 5.6 weeks of paid holiday a year, and an employer can include bank holidays in it. A freelancer is paid for none of that time, and should also allow for illness and training.
Before VAT. If you are VAT-registered, add VAT to the rate you charge; if you are not, the rate is what you invoice.
This calculator gives general information, not legal, tax, financial or accounting advice. Your actual tax depends on your whole income and circumstances: check HMRC's guidance or ask an accountant.
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