Use this to reverse an annual income target into a day rate while allowing for downtime, expenses and a risk buffer. It is useful when you want to quote a contractor rate that survives realistic utilisation rather than a perfect billable year.
CONTRACTOR PRICING
Contractor day rate calculator
Required day rate
£419per day
- Required annual contract revenue
- £92,222
- Equivalent 7.5-hour rate
- £56
- Billable days
- 220
This is a commercial pricing target before deciding whether the engagement is PAYE, umbrella, inside IR35 or outside IR35.
Turn an annual income target into a defensible day rate using realistic utilisation and business costs. This is the kind of calculation contractors use before quoting a new contract or checking whether a headline rate is actually worth it after downtime.
Use this to reverse an annual income target into a day rate while allowing for downtime, expenses and a risk buffer. It is useful when you want to quote a contractor rate that survives realistic utilisation rather than a perfect billable year.
A contractor aiming for a comfortable annual income normally needs to divide by fewer billable days than the calendar year suggests, then add a margin for holidays, admin, insurance and gaps between contracts. The result is often materially higher than the rate someone would quote if they only divided by 220 working days.
- Actual contractor pricing varies with non-billable time, expenses, contract length, holiday cover and how many days you can really invoice.
- IR35 status and employer or agency deductions can also change the final economics.
SOURCES & REVIEW
Checked against official guidance
Last reviewed 1 September 2026 · Rule version GB-2026.27.1
Daily/weekly source monitoring. If a source changes, the affected rule set is reviewed before publication.
All source links are kept visible so you can verify the figures used on this page.
Source line: Contractor pricing assumptions are checked against GOV.UK employment-status guidance and the shared contractor rule set.
GOV.UK: Employment status ↗GOV.UK: Off-payroll working ↗Sources, methodology and update policy →Report an issue or correction →WHY RESULTS DIFFER
Why two users can see different results
Why the result can differ
Different tax codes, payroll periods, Scottish bands, pension methods or lender assumptions can change the outcome.
One-off bonuses, pay frequency, overpayments, allowances and reliefs can move the result away from a simple annual estimate.
Where a rule depends on eligibility or legal status, this page shows an estimate and links to official guidance.
This section is intentionally repeated on key tools so the explanation stays near the result instead of being hidden in a separate policy page.
COMMON QUESTIONS
Frequently asked questions
How many billable days should I use?
Start below the calendar working-day total to allow for holidays, sickness, training, administration and gaps between contracts.
Does the day rate determine IR35 status?
No. Status depends on the working arrangement and facts, not the rate charged.
Should I include expenses in the target?
Yes. If you need to recover business costs from the rate, add them before dividing by billable days.