Freelance Rate Calculator

Going backwards is the hard half

Working out tax on a known profit is arithmetic anybody can do. Going the other way, from the money you want in your hand to the profit that produces it, is a different problem, and it is the one every freelancer actually has. You do not decide to earn eighty three thousand pounds. You decide you need fifty in the bank and work back.

Which is why almost every calculator asks you to guess.

Type in a tax percentage, they say, and we will divide by it. One of the better known ones suggests twenty five. That answer is close enough at some income levels and badly wrong at others, because the real rate on your next pound climbs from nothing to twenty eight to forty two, reaches seventy one in one particular band, then drops back to forty seven. A single percentage cannot follow that shape, so the answer drifts, and it drifts most at exactly the incomes where getting it wrong costs the most.

Here the problem is solved the way it is shaped. Every point where a rate changes is worked out first: the allowance, each tax band, both National Insurance limits, your student loan threshold, and the two ends of the allowance taper. Between any two of those points the arithmetic is a straight line, so the answer comes out directly rather than by trial. Then the answer is put back through the forward calculation to check it lands where it was supposed to, to the penny.

And it is checked against something that shares no code with it. A second method searches for the answer by simply trying values against the forward calculation, knowing nothing about bands or thresholds. The two have to agree, and they are compared across a hundred and forty four combinations of tax system, student loan plan and target, and again at every single point where a rate changes.

The band where the next pound costs seventy one pence

It begins at a hundred thousand pounds of profit. From there your personal allowance falls by a pound for every two pounds you earn, which means an extra pound is taxed at forty percent and also drags half a pound of previously tax free income into the forty percent band. That is sixty pence gone. Add two pence of Class 4 National Insurance and, if you have one, nine pence of student loan, and a pound earned leaves eleven pence behind.

It stops at a hundred and twenty five thousand one hundred and forty, where there is no allowance left to take away and the rate falls back. So there is a stretch of twenty five thousand pounds in the middle of a successful freelancer's career where working harder is worth less than it is on either side of it, and most people in it have no idea.

This page shows the rate on your next pound wherever you land, because that is the number that tells you what a rate rise is actually worth, and whether a pension contribution would be worth more.

Scotland is not a footnote

Scotland sets its own income tax. For this year that means six bands rather than three, starting at nineteen percent and reaching forty eight, with the higher rate beginning about six and a half thousand pounds earlier than in the rest of the UK. Below roughly thirty three thousand pounds a Scottish taxpayer pays slightly less. Above it, noticeably more.

A calculator that says UK and quietly uses the three band version is wrong for everybody north of the border, and it is wrong in a direction that makes them undercharge. So both systems are here, and you pick.

There is a detail underneath that catches people out. Dividends are not devolved, so a Scottish company director pays the same dividend rates as anyone else even though their salary follows Scottish bands. The comparison on this page handles that correctly, which is more than can be said for a number of the tables we checked while building it.

The days you cannot bill are the days that set your rate

A year holds two hundred and sixty working days. Take five weeks of holiday and you have two hundred and thirty five. Allow a week for being ill and it is two hundred and thirty. Then take out the quarter of your time that goes on pitching, invoicing, chasing payment, bookkeeping and keeping up, and you are down to a hundred and seventy two and a half days to carry the whole year.

That is the number your rate is divided by, and it is the number people get wrong, usually by starting from two hundred and sixty. The gap between those two is not small. The same income needs a rate half as high again.

So the page does not just use your number. It shows what happens if it moves: one more week off, a week lost to illness, five points more time you cannot bill, or a four day week. Each of those is a line with a pound figure next to it. A rate that only holds while nothing goes wrong will not survive the first year in which something does.

Where the VAT threshold falls on your own rate

Registration becomes compulsory at £90,000 of turnover in any rolling twelve months. If your clients are businesses that reclaim VAT, crossing it costs you almost nothing. If your clients are the public, or small firms that cannot reclaim it, crossing costs you a fifth of what you keep unless you raise your prices, and raising prices by a fifth in one go is a conversation nobody enjoys.

Which makes it a line worth seeing before you cross it rather than after. The page puts it on your own scale: how many billable days at your rate take you over, roughly how many weeks that is, and the highest day rate that keeps you under for a whole year.

The January that is bigger than the year

The first self assessment bill is not one year of tax. It is one year of tax plus half of the next year paid in advance, and then another half in July. So a first year that looked manageable arrives as roughly one and a half times the number anybody told you, on one day in January, and the money has usually been spent.

It is the same total, paid earlier, and it only happens once. That does not help much if nobody mentioned it. The page works it out alongside the rate, because the rate is what has to pay for it.

Sole trader or company, on the same turnover

This is usually a separate calculator, which makes it hard to compare the thing that matters: the same money, earned the same way, taken out two different ways. So both are here, side by side.

The company route takes a salary at the personal allowance, which keeps income tax and employee National Insurance at nothing while still counting towards a state pension. The company pays employer National Insurance above five thousand pounds at fifteen percent, and corporation tax on what is left: 19 percent up to fifty thousand, twenty five above two hundred and fifty thousand, and an effective twenty six and a half in the band between them, which is higher than either. What remains comes out as dividends, taxed at 10.75 percent and upward, rates that rose by two points in April 2026 and that a number of guides still have at the old figures.

What this comparison leaves out, and says so. Running a company costs money and time: accounts, confirmation statements, a separate bank account, and rules about how and when you can take money out. None of that is arithmetic, so none of it is here. The number on this page is the tax difference and nothing else.

What has actually been tested

Every figure here is a test run that has to pass before anything reaches this page. If one fails, nothing ships. A test reads this page, pulls out every figure in it, and compares each one with the code behind it.

• 52The tax itself, checked against the figures other people publish, and the reverse calculation against a search that shares no code with it tax
• 54Billable time, the rate, how much it moves, the VAT threshold and the two company routes rate
• 40Every file that ships, scanned for generated copy, inline styles, off-origin loads and broken asset paths ship
• 23Every system against every loan plan against every pension, and the figures pushed until they stop meaning anything limits
• 15The live page in a real browser, under the security policy it ships with e2e
• 13Every control used in a real browser, to prove none of them is decoration ui
• 13Every number printed on this page, checked against the code behind it figures
• 13Layout at seven screen sizes, with the browser text enlarged, and the contrast of every line visual
• 10Every icon and image is the real brand asset, and the link preview belongs to this tool brand
• 8The writing itself: sentence rhythm, repeated openers, and the templates that give generated prose away humanise

Properties you can hold it to

• It solves rather than estimatesNo flat tax percentage anywhere. Every band, both National Insurance thresholds, the allowance taper and your student loan are worked out where they actually fall.
• It proves its own answerThe profit it arrives at is put back through the forward calculation, and checked against a second method that knows nothing about bands.
• It shows the workingEvery line of tax, with the band, the rate and the amount, so you can check it against your own numbers rather than trust ours.
• It tells you how fragile the answer isOne number hides its own risk. Six variations sit underneath it with the pound difference each one makes.
• It knows where you pay taxScottish rates are a choice, not an afterthought, and dividends correctly ignore them.
• It separates arithmetic from adviceThe company comparison is the tax difference. The cost and bother of running one is real, is not arithmetic, and is left to you and your accountant.
• It dates its figuresEvery rate on this page carries the day it was checked, because tax tables go out of date quietly and the ones that do not say when they were checked are the worst kind.
• It holds nothingNo account, no history, no storage. Your income is nobody else's business, including ours.

Questions people ask first