Earning £60,000.00 before tax from 46 weeks of 40 hour weeks at 60% billable with £8,000.00 of expenses needs £61.59 an hour to break even, and £73.91 with a 20% buffer.
The instinctive way to set a rate is to divide the income you want by the hours you work. On the default figures that gives £32.61 an hour, and it is wrong in two compounding ways. First, only some of your working time is billable: proposals, admin, invoicing, marketing and learning all consume hours no client pays for. Second, the business has costs, and they come out of revenue before you see a pound of income.
Price at the naive rate with a 60% billable share and £8,000 of expenses, and a year that felt fully booked delivers roughly £28,000 of income against a £60,000 target. The billable hours have to carry all of the non-billable ones and every business cost, which is why the break-even rate is nearly double the naive one. The buffer then sits on top, because a real year has scope creep, gaps between clients and invoices that pay late.
Every figure on this page is gross: income here means what the business earns for you before income tax and National Insurance. What you keep after tax depends on your structure, so take that question to an accountant.
The workings below update as you change the inputs above.
Break-even hourly rates for a 46 week year of 40 hour weeks at three billable shares, before expenses. Add your expenses to the income figure before reading across, and add your buffer on top of the result.
| Income target | 50% billable | 60% billable | 70% billable |
|---|---|---|---|
| £30,000 | £32.61 | £27.17 | £23.29 |
| £40,000 | £43.48 | £36.23 | £31.06 |
| £50,000 | £54.35 | £45.29 | £38.82 |
| £60,000 | £65.22 | £54.35 | £46.58 |
| £80,000 | £86.96 | £72.46 | £62.11 |
| £100,000 | £108.70 | £90.58 | £77.64 |
| £120,000 | £130.43 | £108.70 | £93.17 |
| Hourly rate | Day rate | Hourly rate | Day rate |
|---|---|---|---|
| £40.00 | £300.00 | £75.00 | £562.50 |
| £50.00 | £375.00 | £90.00 | £675.00 |
| £60.00 | £450.00 | £100.00 | £750.00 |
| £70.00 | £525.00 | £120.00 | £900.00 |
Every other input on this page is known or chosen: you decide the income target, the weeks and the buffer, and the expenses are in your accounts. The billable percentage is the one that gets guessed, and the guess is usually generous. A freelancer who assumes 80% billable but actually runs at 55% has under-priced every hour by nearly a third without noticing, and discovers it only when the year's income arrives short.
The fix is to measure rather than estimate: record your time against clients and jobs for a few normal weeks and the real percentage falls straight out. Once you charge on a measured share, the rate holds up. If you run a team rather than working alone, the utilisation rate calculator does the same job at team level, and the margin calculator prices individual pieces of work from their cost.
A calculator can only work from the billable percentage you give it. Quantim replaces that guess with a measured figure, because it records where your time actually goes and then turns the billable part into invoices.
Log time against clients, jobs and activities from a browser or the mobile app as the day happens, so billable and non-billable hours are separated by fact rather than by memory.
Recorded billable time flows into fees and invoices, so the hours you worked at your chosen rate become the bills clients actually receive, without re-keying anything.
Reports show your billable share and earnings by client and job type, so you can see which work earns the rate you planned and which quietly runs below it.
Add your target annual income to your annual business expenses, then divide by the hours you can actually bill in a year, not the hours you work. Billable hours are working weeks times hours per week times your billable percentage. Earning 60,000 pounds with 8,000 pounds of expenses across 1,104 billable hours needs 61.59 pounds an hour just to break even, and most people then add a buffer on top.
Most independent professionals bill somewhere between 50 and 70% of their working time. The rest goes on finding the next client, writing proposals, invoicing, bookkeeping, marketing and learning. New freelancers often assume 90% and price themselves into working for less than they planned, which is why measuring your real billable share matters more than guessing it.
Because you cannot bill every working hour, and clients do not pay your expenses. Dividing 60,000 pounds by 1,840 working hours gives 32.61 pounds an hour, but at a 60% billable share only 1,104 of those hours earn anything, and 8,000 pounds of costs come out before you are paid. Price at the naive rate and you will earn roughly half of what you intended.
The break-even rate is the hourly rate at which your billable hours exactly cover your target income plus your business expenses, with nothing to spare. It is a floor, not a price. Charging below it guarantees you miss your income target; charging exactly at it means one slow month or one scope overrun puts you behind.
Because real years do not run to plan. Projects overrun their scope, invoices are paid late, gaps open between clients, and some months are quiet. A buffer of around 20% on top of the break-even rate absorbs those shocks, so an imperfect year still lands near your income target instead of well below it.
Multiply the hourly rate by the hours a client is buying in a billed day, commonly 7.5 in the UK. At 73.91 pounds an hour, a 7.5 hour day is 554.35 pounds. Quote the day rate slightly under hourly times hours if you want to reward larger bookings, never over it.
No. The income target here is what your business earns for you before income tax and National Insurance, and the expenses field is for business running costs, not personal tax. How much of the income you keep depends on your structure and circumstances, so speak to an accountant for that part.
The billable percentage in this calculator is a guess until you measure it. Quantim records your time against clients and jobs as you work, from a browser or the mobile app, so you know your real billable share instead of an estimate. It then turns the recorded time into fees and invoices, and its reports show which clients and job types actually earn the rate you planned.
Yes. It runs in your browser, there is no signup, and the figures you enter are not saved or sent anywhere.
Every one of these is free, needs no signup, and works its answer out in your browser. Nothing you type is saved or sent anywhere.
See what unrecorded billable hours cost your practice over a year, and what capturing them could recover. Includes a charge-out rate and margin calculator.
Open the ROI calculator →Measure chargeable utilisation against the capacity you actually have, then size the gap to your target in hours first and fees second.
Open the utilisation calculator →Work out the hours between a start and a finish, less unpaid breaks, in hours and minutes and in decimal hours. Overnight shifts and a full week included.
Open the hours calculator →Play through the whole flow: log time against a job, review the fees it earns, then raise the fee invoice. No signup, nothing to install.
Open the demo →Enter your hourly rate, contracted hours and overtime hours at your contract multiplier and see gross overtime pay, effective hourly rate and the annual cost.
Open the overtime calculator →Enter cost and selling price to see profit, markup and margin side by side, or work backwards from a markup or target margin to the price to charge.
Open the margin calculator →Convert one gross amount into every UK pay period at once: per hour, day, week, fortnight, four weeks, calendar month, quarter and year, on your own hours and days.
Open the pay converter →This calculator is only as good as the billable percentage you feed it. Quantim measures where your time really goes, turns the billable hours into invoices, and shows whether each client earns the rate you set. Try it free for a month. No credit card needed. Free data migration. Cancel anytime.
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