How I calculated my freelance day rate (and why most people get it wrong)

When I started freelancing, I made the classic mistake: I took my old salary and divided by working days. £50,000 / 260 days = £192/day. Easy. Wrong. That calculation ignores tax, National Insurance, pension, holidays, sick days, admin time, equipment, insurance, and the fact that you won't bill every working day. Here's the real formula. The actual calculation Start with your target take-home. Not salary — what you actually want in your pocket after everything. Then add: Income Tax (20% on £12,571–£50,270, 40% above) Class 2 NI (£3.45/week) Class 4 NI (6% on £12,570–£50,270) Pension contributions (if you're smart) Business insurance (£300–£1,000/year) Software and equipment (£500–£2,000/year) Accountant (£150–£400/year) Then divide by actual billable days. Not 260. More like 200–220 after holidays, sick days, and admin. The difference is massive Using the naive calculation: £192/day. Using the real calculation with the same £50k target: £280–£350/day , depending on your expenses. That