Guide
How to Price Freelance Work
A practical UK guide to setting sustainable freelance rates. Learn the key formula, compare hourly, day and project pricing, and avoid the mistakes that cost freelancers money.
Why pricing is hard for freelancers
Most freelancers undercharge at first. There is no HR department setting your salary, no pay scale to reference and no guaranteed paycheck at the end of the month. It is easy to look at a permanent employee salary and think your day rate should match it — but that ignores the reality of running your own business.
As a freelancer you pay your own tax, National Insurance, pension, insurance, software, equipment and holidays. You also spend a surprising amount of time on work you cannot bill for: proposals, admin, sales calls and professional development. Your headline rate needs to cover all of that.
Main pricing methods
There are three common ways to price freelance work in the UK:
Hourly rate
Best for small tasks, support or work that genuinely takes a few hours. Clients understand it easily, but it can penalise efficiency — the faster you work, the less you earn. It also encourages clients to watch the clock.
Day rate
The standard for UK freelancers, especially in consulting, design and development. A day rate simplifies invoicing, values your expertise over exact hours and protects you from scope creep on small tasks. Most agencies and clients expect day rates.
Project rate
A fixed price for a defined piece of work. This rewards efficiency — finish faster and your effective hourly rate goes up. The risk is scope creep, so you need a clear brief, defined deliverables and a process for handling extra work.
The key formula for freelance pricing
The foundation of every sustainable freelance rate is the same simple calculation:
rate = (annual income target + annual expenses) ÷ billable days
Your income target is what you want to take home personally. Your expenses are everything the business costs: software, equipment, accountant fees, insurance, coworking and so on. Billable days are the days you actually invoice clients for — not your total working days.
What are billable days?
Billable days are the days you invoice clients for. They are not the same as working days. Here is a realistic breakdown for a UK freelancer:
- 5 days per week × 52 weeks = 260 working days
- Minus 25 holiday days = 235 days
- Minus 15 sick and admin days = 220 available days
- Only 60–75% of available days are billable = 132–165 billable days
That last figure surprises most new freelancers. If you assume you can bill every working day, you will set a rate that leaves you short. Use realistic billable days from the start.
Example calculation
Let us run the numbers for a typical UK freelancer:
- Desired annual take-home income: £60,000
- Annual business expenses: £5,000
- Billable days per year: 140 ( realistic for a solo freelancer )
day rate = (£60,000 + £5,000) ÷ 140 = £65,000 ÷ 140 = £464 per day
If you work 7.5 hours per day, that is roughly £62 per hour. This is before personal tax — the figure you charge clients, not your net salary.
Many freelancers also add a buffer of 10–20% for pension contributions, late payments, equipment replacement and professional development. With a 15% buffer:
£65,000 × 1.15 = £74,750 target ÷ 140 days = £534 per day (£71 per hour)
Common mistakes
1. Ignoring non-billable time
Proposals, invoicing, sales calls, networking and learning are essential — but clients do not pay for them. If you price based on total working days instead of billable days, you will work evenings and weekends just to catch up on unpaid admin.
2. Underpricing early work
New freelancers often charge too little to "get a foot in the door." The problem is that clients remember your first price. Raising rates later is harder than starting correctly. Calculate your minimum sustainable rate and hold firm. There will always be cheaper competitors — you are not competing on price.
3. Matching employee salaries
A £60,000 employee salary includes paid holiday, sick pay, pension contributions, equipment and software. A freelancer needs a higher headline income to end up with the same take-home pay. Do not divide a salary by 260 and call it a day rate.
4. Forgetting to review rates regularly
Costs rise, skills improve and demand changes. Set a calendar reminder to review your rate annually. Many experienced freelancers raise rates every year, even with existing clients.
Hourly vs day rate
Both are valid, but day rates suit most freelance work better:
- Day rate — simpler for clients, protects your time, discourages micromanagement, standard in UK consulting and creative industries
- Hourly rate — better for small tasks, maintenance, support or work that genuinely takes a few hours
If a client insists on hourly tracking, consider setting a minimum charge — for example, half a day — so small requests do not consume your schedule.
Try the calculator
Want to run your own numbers? Use the Freelance Rate Calculator to work out your hourly rate, day rate and annual revenue target instantly.
Frequently asked questions
What is the best way to price freelance work?
It depends on the project. Hourly and day rates work well for ongoing or undefined work. Project rates are better when the scope is clear and you want to reward efficiency. Start with a rate that covers your income goal, expenses and non-billable time, then choose the format that suits the job.How many billable days does a freelancer have per year?
Most UK freelancers work around 220–230 days a year before holidays and sick leave. After removing 25 holiday days, 10–15 sick/admin days and accounting for 30–40% non-billable time, realistic billable days are often 120–160 per year.Should I charge hourly or daily?
Use a day rate for most client work — it protects you from micro-tracking every hour and values your expertise, not just your time. Use an hourly rate for small tasks, support or work that genuinely spans partial days.What counts as non-billable time?
Sales calls, proposal writing, invoicing, admin, professional development, networking and marketing. Any work that keeps your business running but is not invoiced to a client.How do I avoid underpricing as a new freelancer?
Calculate your minimum rate using your actual costs and target income, not by guessing or matching employee salaries. Remember you pay your own tax, pension, holidays and equipment. If the number feels high, it is usually correct.When should I raise my rate?
Review annually at minimum, and sooner when your skills, demand or costs increase significantly. Many freelancers raise rates with existing clients once a year and charge new clients the higher rate immediately.