Contractor Daily Rate Calculator
Work out your contractor daily rate from a target annual income. Factor in holidays, public holidays, non-billable days and overhead to set a profitable day rate.
Updated 2026-06-14 · Free · No sign-up · Runs privately in your browser
Show the formula & steps
How the Contractor Daily Rate Calculator Works
This calculator turns the annual income you want to take home into a daily rate you can quote to clients. Unlike a salaried employee, a contractor is only paid for days actually worked, so the day rate has to recover your target income across a smaller number of billable days and also cover business overheads.
Enter your target annual income, the days you expect to take off, an overhead and profit markup, and how many hours you bill per day. The tool returns your billable days, a day rate and the matching hourly rate.
The Formula
Billable days = (5 × 52) − holiday days − public holidays − non-billable days Required revenue = target annual income × (1 + overhead %) Day rate = required revenue ÷ billable days Hourly rate = day rate ÷ billable hours per day
The 5 × 52 = 260 figure is the number of weekdays in a year. Everything you subtract from it is a day you cannot invoice, which is why generous holiday plans push the day rate up.
Worked Example
Suppose you want a target annual income of 80,000, with 25 holiday days, 8 public holidays, 20 non-billable days, a 20% overhead markup, and 8 billable hours per day:
- Billable days = 260 − 25 − 8 − 20 = 207 days
- Required revenue = 80,000 × 1.20 = 96,000
- Day rate = 96,000 ÷ 207 = ≈ 464/day
- Hourly rate = 464 ÷ 8 = ≈ 58/hr
Choosing Your Inputs
The single biggest lever is billable days. The more time off you plan, the higher each remaining day must be priced to hit the same income.
| Days off plan | Billable days | Day rate at 96,000 revenue |
|---|---|---|
| Lean (15 holiday, 8 public, 10 non-billable) | 227 | ≈ 423/day |
| Standard (25 holiday, 8 public, 20 non-billable) | 207 | ≈ 464/day |
| Generous (35 holiday, 8 public, 30 non-billable) | 187 | ≈ 513/day |
Why Contractors Charge More Than Employees
A day rate that simply matches a salary leaves you worse off than an employee. The markup and billable-day logic exist to cover unpaid holidays, pension contributions, equipment, insurance, accounting fees and the inevitable gaps between contracts. Treat the result as a floor, then add a premium for scarce or specialist skills.
Frequently asked questions
How do I calculate my contractor day rate from a salary?+
Start with the annual income you want, add an overhead and profit markup, then divide by the number of days you can actually bill. Billable days are the 260 weekdays in a year minus your holiday, public holidays and non-billable days such as admin, sick days and training.
How many billable days are there in a year?+
A standard working year has about 260 weekdays (5 days × 52 weeks). After subtracting roughly 25 holiday days, 8 public holidays and 20 non-billable days for admin and sick leave, a typical contractor has around 207 billable days. Adjust these inputs to match your own plan.
Why should I add an overhead markup to my rate?+
As a contractor you cover costs an employee never sees: software, equipment, insurance, accounting, pension and gaps between contracts. An overhead and profit markup of 15-30% on top of your target take-home income builds these costs and a margin into the day rate.
How do I convert my day rate to an hourly rate?+
Divide the day rate by the number of billable hours you work in a day. If your day rate is 480 and you bill 8 hours a day, your hourly rate is 480 ÷ 8 = 60 per hour. Use fewer hours per day if part of each day is unbillable.
Should my day rate match what a permanent employee earns?+
No. A contractor day rate should be higher than the equivalent salaried pay because it must also cover unpaid holidays, pension, benefits, downtime between contracts and business overheads. This calculator builds those gaps in through billable days and the overhead markup.