Freelance day rate: formula, example and utilization
Your day rate is your hourly rate times the hours per working day, or your yearly revenue divided by the days you really book. In the example it is $712 per day.
Two ways to the same result
With the defaults the day rate is $712: $89.05 per hour times 8 hours.
1. From the hourly rate: day rate = hourly rate × hours per working day. In the example $89.05 × 8 = $712.
2. From yearly revenue: day rate = revenue needed ÷ bookable days per year. In the example $97,333 ÷ 136.6 days = $712.
How many days can you book?
Of 261 working days, 228 remain after time off and about 137 can be sold at 60%.
Not every working day is a sold day. The example calculates like this:
| Step | Days |
|---|---|
| Working days per year (5 per week) | 260.7 |
| minus vacation, holidays, sick and training days (33) | 227.7 |
| of which billable (60%) | 136.6 |
Day rate by utilization
The fewer days you sell, the higher the day rate must be to leave the same take-home pay:
| Billable share | Days per year | Day rate |
|---|---|---|
| 40% | 91.1 | $1,069 |
| 50% | 113.9 | $855 |
| 60% (example) | 136.6 | $712 |
| 70% | 159.4 | $611 |
| 80% | 182.2 | $534 |
Converting a day rate to an hourly rate
Divide the day rate by the hours you really work and bill on that day. If you bill only six of eight hours, divide by six. Otherwise the hourly figure comes out too low and the day rate too high in return.
Frequently asked questions
How do I calculate a day rate as a freelancer?
Multiply your hourly rate by the hours per working day, or divide the revenue you need by the days you can book. Both give $712 in the example.
How many days per year should I plan with?
Not with all weekdays. After vacation, holidays, sick and training days 227.7 working days remain in the example, of which about 137 are bookable at 60% utilization.