About the Day Rate Calculator
This day rate calculator converts between a daily rate and a yearly figure using the number of days you can actually bill. A year has about 260 weekdays, but contractors and freelancers are not paid for holidays, public holidays, sick days or gaps between contracts, so the calculator subtracts those first. That gives a realistic annual income from a day rate, and the day rate you need to match a salary.
It suits contractors weighing up an offer, permanent employees thinking about going freelance, and hiring managers comparing a day-rate contractor with a salaried hire. In day-rate mode, enter the rate and your expected days off to see annual, monthly and hourly income, plus the permanent salary it is roughly equivalent to after allowing for the benefits an employee gets (pension contributions, paid leave, sick pay, training). In salary mode, enter a salary to see the day rate needed to replace it.
All figures are before tax and business costs. The "benefits and costs" percentage is your own assumption — 15% to 30% is a common range once employer pension, insurance, equipment and unpaid admin time are counted. Pick a currency to match your market; the maths is the same anywhere.
With the default inputs, the result is $111,000.00. Change any value above to recalculate instantly.
How to use the day rate calculator
- 1Choose whether you are converting a day rate or a salary.
- 2Enter the day rate or salary and pick your currency.
- 3Enter days worked per week and the days you expect not to bill.
- 4Set the value of permanent-employee benefits to compare fairly.
- 5Read annual, monthly and hourly figures and the equivalent rate.
Formula and method
The calculator starts from the weekdays in a year (52 × days worked per week, so 260 for a five-day week) and subtracts days you will not bill: annual holidays, public holidays, sickness, training and time between contracts. Annual contract income is the day rate multiplied by the remaining billable days; monthly income is that divided by 12 and the hourly rate is the day rate divided by hours in a day.
To compare with a permanent job, the annual income is divided by (1 + the benefits percentage) to give an equivalent salary, reflecting that an employee also receives paid leave, employer pension contributions and other benefits. Going the other way, the salary is grossed up by that percentage and divided by billable days to find the day rate needed to match it. Tax, business expenses and statutory schemes (such as IR35 in the UK) are not included.
- Billable days
- Days you are paid for in a year
- Benefits %
- Value of employee benefits and costs a contractor bears personally
Worked examples
$500 a day with 38 days off
260 weekdays minus 33 days of holidays and 5 other days leaves 222 billable days. At $500 a day that is $111,000 a year ($9,250 a month, $62.50 an hour). Allowing 20% for employee benefits, it is roughly equivalent to a $92,500 salary.
Day rate needed to replace an £80,000 salary
Grossing £80,000 up by 20% for benefits gives £96,000 to earn. Spread over 222 billable days, the contractor needs about £432 a day — far more than £80,000 ÷ 260 = £308.
€650 a day, four-day week
A four-day week gives 208 weekdays; minus 35 days off leaves 173 billable days. At €650 that is €112,450 a year, roughly an €89,960 permanent salary after allowing 25% for benefits.
Frequently asked questions
How do I convert a day rate to an annual salary?+
Multiply the day rate by the days you will actually bill — typically 220 to 230 for a five-day week once holidays and public holidays are removed — not by 260. Then reduce it by the value of benefits a permanent employee would get.
How many working days are there in a year?+
About 260 weekdays (52 × 5). After 20–25 days of annual leave and 8–11 public holidays, most full-time employees work around 225–232 days.
What day rate equals a salary?+
Gross the salary up by the benefits you would lose (often 15–30%) and divide by your billable days. Replacing a 60,000 salary at 20% and 222 days needs about 324 a day.
Why are contractor day rates higher than salaries?+
Contractors are not paid for holidays, sickness or gaps between contracts, and they pay for their own pension, insurance, equipment and admin. The higher rate compensates for that risk and those costs.
Results are estimates for educational purposes and are not financial advice. Rates, fees and terms vary — confirm with your lender or a licensed advisor before making decisions.