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Day rate calculator for self-employed trades: what to charge a day to earn what you need
Enter the income you want, your yearly costs and the days you cannot bill, and see the day rate and hourly rate that cover them, with and without VAT.
Most day rates are copied from the firm down the road. The sum below starts from the other end: what you need to earn, what the business costs to run, and how many days a year somebody pays you for. The third number is the one people get wrong.
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Day rate calculator for trades: what to charge a day and an hour to earn what you need
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The sum, written out
The calculator does four things, and you can check each with a phone.
- Add what you need. Income before tax, plus what the business costs to run: van, fuel, tools, insurance, phone, accountant, software.
- Add an allowance. A percentage on top for the invoice that is never paid and the fortnight in January when the phone does not ring.
- Count the days you can bill. Weeks worked times days a week, less the days that go on quoting, paperwork, chasing payment and call-backs.
- Divide. The money needed, divided by the days you can bill, is the day rate. Divide by the hours in your day for an hourly rate.
With the figures the calculator opens with:
| Step | Figure |
|---|---|
| Income wanted before tax | £45,000 |
| Business costs | £12,000 |
| 10% allowance on £57,000 | £5,700 |
| Money needed in a year | £62,700 |
| Days worked: 46 weeks of 5 | 230 |
| Days lost: 3 a month | 36 |
| Days you can bill | 194 |
| Day rate before VAT: £62,700 ÷ 194 | £323.20 |
| Hourly rate over 8 hours | £40.40 |
Divide the same £62,700 by all 230 days and the answer is £272.61. That is the rate of someone who believes every working day is paid. The gap between the two, £50.59 a day, is what the unbilled days cost when they are left out of the price.
AI staff and workflows for trades and building firms. Starting with enquiry to quote.See what we would set upDays you cannot bill
Three days a month is a guess until you count. For one month, write down each half day that nobody paid for: site visits to price work, writing up quotes, ordering materials, the invoice run, chasing money, going back to fix a snag. Whatever the total comes to, enter it; a counted figure beats a guess in either direction.
Those days are real work. The customer who gets a clear written quote and a proper invoice is paying for them whether you price them or not; the only question is whether the money is in the rate. Our guide to writing a quote for a job shows what a quote needs to hold so that it takes minutes, not an evening.
What a recovered day is worth
The last line of the result is the one to read twice. Each unbilled day a month that you turn back into paid work is 12 more paid days a year. At the example rate that is £3,878.35 of extra income. Or you can keep your income the same and drop the day rate from £323.20 to £304.37, which wins quotes.
That is the honest case for getting the office work done faster, by a part-time bookkeeper, a partner, software or anything else: it is worth what the recovered days are worth, and no more. If the paperwork takes one day a month, there is little to win. Our admin scorecard for trades firms counts the hours job by job.
VAT and the rate you quote
If you are VAT registered, the customer pays the day rate plus 20%: £387.84 on the example. A householder cannot claim that back, so quote the figure including VAT and say so. A business customer usually can, so quote before VAT and state that VAT is added.
AI staff and workflows for trades and building firms. Starting with enquiry to quote.See what we would set upIf you are not registered, the day rate is the whole price, and the costs you entered should be the amounts you pay including VAT, because you cannot reclaim it. Turnover, not profit, decides when you must register; our guide to the rolling 12-month VAT test shows how to watch it.
Three checks before you use the number
- Tax is not in it. The income figure is before Income Tax and National Insurance. Put in what you need before tax, not what you want to take home.
- Materials are separate. A day rate prices your time. Materials go on the quote as their own line, with whatever margin you add for buying and collecting them.
- Price the job, quote the job. Most customers want a fixed price, not a meter running. Use the day rate to build the price: days on site times the rate, plus materials. If the job overruns because you priced it short, that is your cost; if the customer adds work, that is a variation at the same rate.
A rate worked out this way is easier to hold when someone asks you to knock a bit off, because you know what each £10 comes out of.
Overlyft 
can set up an AI assistant that drafts quotes, invoices and payment chasers for a tradesperson to approve. Whether that is worth paying for depends on the same sum: the unbilled days it would give back.
Where this comes from: Our own arithmetic, shown in full on the page and checked by hand; VAT at the standard rate of 20% (GOV.UK VAT rates, read 2026-10-01). The test record is in tests/gaffer/tools-check.txt.
AEO Lookup editorial team
We write practical guides for people who run small UK firms, and we check every fact against its source on the date shown. Read how we review, or tell us if something has changed.
