Personal Finance
Salary to Day Rate Calculator
Divide a salary by billable days to see a day-rate starting point.
Salary as a contractor day rate
Turning a salary into a day-rate equivalent helps when you move between permanent and contract roles. Divide a target equivalent by expected billable days, and remember freelancers fund holiday and gaps themselves. Benefits on the permanent side have cash value — add pension match and holiday before you call the rates ‘equal’. For a fuller freelance floor use freelancer minimum rate; reverse the conversion with day rate to salary. Lower utilisation needs a higher day rate for the same annual income. Not IR35 or tax advice. Specialist niches with short project bursts should assume fewer billable days and a higher floor rather than copying a generalist rate card. Track actual utilisation for a quarter and revise the conversion — optimistic calendars are the usual reason freelancers drift below a living equivalent. Review the floor when insurance or coworking costs jump. Specialist niches with short project bursts should assume fewer billable days and a higher floor rather than copying a generalist rate card. Track actual utilisation for a quarter and revise the conversion — optimistic calendars are the usual reason freelancers drift below a living equivalent. Review the floor when insurance or coworking costs jump.
Worked example
Target equivalent £55,000 including a mental uplift for benefits, 200 billable days → £275/day before buffer. At 170 billable days the same annual target needs about £324/day. Market rates may sit higher for scarce skills — treat the figure as a floor, not a ceiling.
Limits and assumptions
Ignores umbrella margins, employer NI equivalents and regional demand. IR35 status changes take-home dramatically — get professional advice. Not a rate card for your niche.
Frequently asked questions
How many billable days should I assume?
Often 180–220 after holiday and sales gaps. Lower utilisation needs a higher day rate for the same annual income.
Should benefits be added to salary first?
Yes when comparing fairly — pension match and holiday have cash value on the permanent side.
Is the equivalent day rate what I should charge?
It is a starting point. Market rates, scarcity and specialist skills may sit higher.
How do I quote half-days?
Agree a half-day rule (often 60% of the day rate) and stay consistent across clients.
Should VAT sit on top?
If VAT-registered, state ex-VAT rates clearly. Salary equivalents usually ignore VAT.