Work out the day rate you need as a contractor or consultant to match a salary, including the benefits, payroll taxes and expenses an employer would normally cover. Or convert any rate between hourly, daily, weekly, monthly and yearly.
Last updated:
What do you want to do?
$
wk
Income and costs
$
The salary you would want as an employee.
%
Health insurance, retirement match, etc. as % of salary.
%
US: the employer half of Social Security + Medicare you now pay.
Share of working days spent on sales, admin, training, gaps.
Enter your values to see the result.
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How to use the Day Rate Calculator
Choose a mode: find your day rate, or convert a rate you already have.
Enter the salary you want and the benefits, extra tax and expenses you must now cover yourself.
Enter your working time: days per week, billable hours per day, holidays, vacation, sick days and non-billable share.
Add a buffer for gaps between contracts.
Read the minimum day rate and compare it with the table of billable days.
Day rate formula
Working days = 52 × days per week − public holidays − vacation − sick days
Billable days = working days × (1 − non-billable %)
Revenue needed = (target income + benefits + extra payroll tax + business expenses) × (1 + buffer %)
Day rate = revenue needed ÷ billable days; hourly rate = day rate ÷ billable hours per day
Example (the default $90,000 consultant): benefits 15% ($13,500), extra tax 7.65% ($6,885) and $6,000 expenses make $116,385, plus a 10% buffer = $128,023.50. With 260 weekdays − 35 days off = 225 working days and 15% non-billable time, there are 191.25 billable days, so the day rate is $669.40 ($83.68 an hour over 8 hours). An employee on the same salary earns $90,000 ÷ 260 = $346.15 per day.
Rate conversion at 8 hours a day, 5 days a week, 46 weeks a year
Hourly
Daily
Weekly
Monthly
Yearly
$40
$320
$1,600
$6,133
$73,600
$60
$480
$2,400
$9,200
$110,400
$75
$600
$3,000
$11,500
$138,000
$100
$800
$4,000
$15,333
$184,000
$150
$1,200
$6,000
$23,000
$276,000
Tips for setting a day rate
Be realistic about non-billable time: finding work, proposals, invoicing and learning can take 15% to 30% of working days.
State what a day means in your contract (for example 7.5 or 8 hours) and how extra hours or half days are billed.
Check market rates for your skill and region; if your minimum rate is above the market, look at expenses and utilization first.
Review your rate every year as costs and experience grow.
Frequently asked questions
How do I calculate a contractor day rate?
Add up the income you want, the benefits and payroll taxes an employer would pay, and your business expenses, then divide by the days you can actually bill in a year. Day rate = yearly revenue needed ÷ billable days.
How many billable days are there in a year?
There are about 260 weekdays a year. After roughly 10 public holidays, 20 vacation days and 5 sick days, about 225 remain, and after time for sales, admin and gaps many contractors bill somewhere between 170 and 210 days.
How do I convert a salary to a day rate?
A simple employee figure is salary ÷ 260 working days: $90,000 ÷ 260 = $346 a day. A contractor needs far more, often 1.5 to 2.5 times that, because of unpaid time off, benefits, self-employment tax and business costs.
How do I convert a day rate to an hourly rate?
Divide the day rate by the billable hours in a day. A $650 day rate for a 7.5-hour day is $86.67 per hour; for an 8-hour day it is $81.25 per hour. Agree with the client how many hours a day covers.
What is the extra self-employment tax?
In the US, employees pay 7.65% for Social Security and Medicare and the employer pays the other 7.65%. Self-employed people pay both halves (15.3% self-employment tax, with Social Security capped at the yearly wage base), so a contractor should add about 7.65% to match an employee's take-home pay.
Should I charge a day rate or an hourly rate?
Day rates suit work billed in full days, such as consulting, workshops, film, photography and on-site contracting, and they avoid tracking every hour. Hourly rates fit short or unpredictable tasks. Many contractors quote a day rate and keep an hourly rate for small extras.
Are all the tools on FreeToolCabin tested for quality and accuracy?
Yes! Every tool on our site undergoes automated Q/A testing in real browser environments to ensure high precision, correct output, and zero errors. If you happen to spot a bug or have a suggestion, please contact us at [email protected] and our team will review it right away.