◼️ Tom⇒maths: Calculating Day Rates for Freelancers

Calculating Day Rates for Freelancers

This day rate calculator was created by me and is based on Paddy McNulty's advice given during GEM NE's training session ""How Much!" Know Your Value - Pay and Conditions of Freelancing", 12/01/2022. It was initially produced as a spreadsheet but this might be quicker and easier for people who don't want to download their own version to play with. It also gave me an opportunity to play around with some coding¹.

A hand offers a money bag to a confused person.

To use it, just change the numbers in each of the editable fields. Totals and rates will be updated automatically as you do so. If you're not sure what to put in any of the fields, just experiment with some different numbers. and see what happens:

Annual Income

Salary (before tax, pension, etc)	£
You could think of this as an equivalent salary that you'd be happy to work for if you were to go back to working for someone else.
Projected costs & expenses	£
If you were working for someone else you'd expect things like insurance and work expenses to be covered by them, so estimate how much extra you'd need to cover these as a solo act.
Desired reserves/profit	£
Building a business costs money; fallow and rainy days can pop up at any time, or you might just want to be able to put something in your savings. How much do you think is right?
Target Income	{{ salary + costs + reserves \| currency : "£" }}
This is simply the previous three numbers added together, and gives some idea of what someone else may spend on you if you were working for them full-time.

The target income above will give you an idea of what you'll need to have landing in your bank account over the course of a year to continue living in the manner to which you have (or would like to) become accustomed.

To work out what to charge people to make that happen, carry on into the next section:

Daily Rate

Working days per year:	days
According to Paddy, freelancers get about 150 days of paid work per year: this needs to cover all of the income that you've stated in the cells above. Feel free to change this if you win more or fewer proposals (on average) in a year.
Holiday / sick days per year	days
Everyone gets ill from time to time, and we're all entitled to days off. These need to be covered financially, though, so we've got to include them in our calculation. Paddy suggested 28 days per year is reasonable, but you may want to give yourself more holiday, or provide a larger buffer for sick days (or reduce these if you're only freelancing for part of the time).
Final Day Rate	*{{ ( ( holidays (salary + costs + reserves) / workingdays) + (salary + costs + reserves) ) / workingdays \| currency : "£" }}**
This is your target daily rate to charge if you want to reach your target income over the working, holiday and sick days entered above.

The daily rate calculation works out how much you'd need to charge per working day to meet your target income from the previous section, and assumes that you want the same level of income for your paid sick and holiday leave. It then spreads this extra income requirement across your projected working days.

Sometimes we don't work full days in one go, though, so...

Hourly Rate

Working hours per day:	hours
A standard working day is around 8 hours* long. If you're happy to work longer hours, or if you want to work shorter days feel free to change this!*
Final Hourly Rate	*{{ ((( ( holidays (salary + costs + reserves) / workingdays) + (salary + costs + reserves) ) / workingdays)) / workinghours \| currency : "£" }}**
If you're not working a full day, e.g. you're delivering a session at a conference, or doing bits of work here and there, this is how much you should be charging per hour. Be aware that you should probably include time to prepare, travel, set up, etc when you're calculating what to charge in order to hit your targets set above.