Day Rate from Salary Calculator
Convert an employee salary into the freelance day rate that actually matches it, once benefits, taxes and unbillable time are added back.
How it works
Grossed-up = salary × (1 + on-cost%) · Revenue = grossed-up + expenses · Day rate = revenue ÷ billable days
Dividing a salary by 260 weekdays badly understates the day rate you need as a freelancer. An employee’s pay is only part of their cost: employers also fund payroll taxes, benefits, pension, paid leave and equipment, which as a contractor you pay yourself. Grossing the salary up for those on-costs, adding business expenses, and spreading it over only your billable days gives the rate that genuinely matches the old package.
Worked example
An $80,000 salary uplifted 30% for benefits and employer costs is $104,000; adding $8,000 of expenses needs $112,000 of billings. Over 200 billable days that is $560 per day — far above the naive 80,000 ÷ 260 = $308.
Frequently asked questions
Why not just divide salary by working days?
Because salary is not the full cost of employing you. Employers also pay payroll taxes, benefits, pension contributions, paid time off and overheads — often 20–40% on top. As a freelancer you cover all of it, so the rate has to be grossed up first.
What on-cost percentage should I use?
It depends on the benefits you are replacing. A rough range is 20–30% for basic payroll taxes and modest benefits, higher if you are self-funding generous health cover, pension and paid leave. Err on the higher side to avoid underpricing.
Why are billable days so much fewer than 260?
The 260 figure assumes you sell every weekday with no holidays, sick days, admin, marketing or gaps between contracts. Realistic freelance billable days are frequently 180–220, which raises the day rate accordingly.
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Educational estimate, not financial advice.