Most UK tradespeople are underpricing and do not know it. The day rate that felt fair when you went self-employed quietly stopped covering reality: insurance went up, the van needs replacing, the tax bill landed harder than expected, and the quiet weeks still have to be paid for somehow. A full diary is not the same as a healthy business.
This calculator works out the day rate you should charge to hit your take-home after overhead, downtime and the taxman. Adjust your figures above and watch, in real time, the number you need to invoice per day to actually keep what you set out to earn.
How to read the results
- Recommended day rate is the headline figure: what you need to invoice per billable day to take home your target after overhead, downtime and tax.
- Recommended hourly rate is the same number broken down to the hour, handy for short jobs and call-outs.
- Billable days/year is the total days you actually get paid for in the year. It is the denominator almost everyone gets wrong.
- Annual overhead is the fixed cost of staying open, win or lose: the number people most often forget.
- Pre-tax turnover needed is the total you must invoice across the year before tax, so that what is left matches the take-home you asked for.
Days worked is not the same as billable days
This is the heart of the problem. Picture two tradespeople who both want £40,000 take-home, both carry £12,000 of overhead, and both put aside 20% for Class 4 NIC and income tax. The first assumes he invoices all five days a week, fifty weeks a year, and lands on a comfortable-looking rate. The second knows the truth: quoting, supply runs, paperwork and chasing payment swallow a day, and holiday plus quiet weeks pull the year down to forty-six. He divides the same target across far fewer billable days and lands on a markedly higher rate.
Both work the same hours. But the first is charging well below what he needs, and does not notice until the year ends and the numbers do not add up. The day you do not invoice still has to be paid for, and it can only be paid by the days you do invoice.
The costs nobody counts
The second hole is counting only the materials on each job. The van, the public liability insurance, the tools that break, the invoicing software, the phone, the accountant: all of it exists no matter which jobs you win. If you do not spread it across your billable days, you absorb it from your own profit without noticing. The calculator forces you to enter that full annual figure, which is almost always higher than people remember when they first add it up.
The taxman takes his cut before you do
The third hole is treating your day rate as take-home. It is not. As a self-employed sole trader you pay income tax and Class 4 National Insurance on your profit, so the money you actually keep is well below what you invoice. If you set your rate against the take-home you want without grossing it up for tax, you fall short the moment the bill arrives. The tax allowance slider builds that buffer in. And VAT, if you are registered, sits on top of all of this: it is the customer's tax passing through your books, never part of your rate.
By the day or fixed price
A day rate protects you, but a fixed price reassures the customer, because they know what they will pay before you start. They are not mutually exclusive: the healthy move is to work out your true cost per day with this tool and use that rate to build fixed-price quotes. Estimate the days a job will take, multiply by your rate, add materials and margin, and present a single closed number. The day rate is your floor; the fixed price is how you present it. The conversion page explains how to present that price so it closes, and the guide on quotes that win more jobs goes into the detail.
What to do with the number
If your real rate came out higher than what you charge today, it does not mean raising prices overnight. It means you now know your floor and can make decisions with data: which jobs are worth it, which to turn down, where to trim overhead, or how to recover billable days. The operations page covers how to win back billable days by automating paperwork and quotes. Once your rate is clear, the next step is the profit per job: run the job profit margin calculator to check each quote keeps the margin your day rate assumes. Then talk to us and we will look at the numbers together.
Explore the rest of the free tools to size up other parts of your business.