Day Rate Calculator — Contractor and Freelance Project Pricing (2026)
A $800 day rate booked 3 days a week for 46 weeks bills $110,400 a year and leaves you about $78,355 after tax and expenses. That is 138 booked days — the number that matters far more than the rate itself. The same $800 at five days a week would bill $184,000. A day rate quoted without a utilisation figure describes almost nothing.
| Annual invoiced revenue | $110,400.00 |
|---|---|
| Business expenses | −$6,000.00 |
| Total tax (SE + federal + state) | −$32,044.86 |
| Set aside for taxMove this to a separate account the day the invoice clears. | $32044.86 |
| Combined marginal rateSelf-employment tax plus your federal and state marginal income tax rates. This is what the next dollar costs you. | 45.0% |
| Your day rate | $72,355.14 |
How a day rate becomes a year
Three multiplications and a tax calculation. The arithmetic is trivial; the reason people get the answer wrong is that they guess the middle term.
On this example: 46 working weeks × 3 days = 138 booked days, × $800 = $110,400 billed, leaving $78,355 after expenses and tax including California income tax.
The number nobody quotes
Contractors compare day rates constantly and almost never compare utilisation, which is the term that actually decides the year. Here is the identical $800 rate across a realistic range of booked days:
| Booked days/week | Days a year | Billed | Take-home | vs 2 days |
|---|---|---|---|---|
| 2 | 92 | $73,600 | $56,881 | — |
| 3 (yours) | 138 | $110,400 | $78,355 | +$21,475 |
| 4 | 184 | $147,200 | $99,062 | +$42,182 |
| 5 | 230 | $184,000 | $119,274 | +$62,393 |
Two days a week and five days a week at the same rate are a factor of 2.5 apart on revenue and $62,393 apart on take-home. When another contractor tells you their day rate, they have told you roughly nothing about what they earn — and the ones quoting the highest rates are frequently the ones with the most unbooked days, because a high rate is part of what keeps the calendar empty.
Note also that take-home does not scale linearly with the days. Going from 2 to 5 days multiplies revenue by 2.5 but take-home by only 2.1, because the extra income lands in higher brackets. The last day of the week is worth materially less after tax than the first.
Raise the rate or fill the calendar?
The two are arithmetically interchangeable and practically not. A 25% rate rise and a 25% increase in booked days produce identical revenue — but the extra days cost you 35 working days a year and the rate rise costs you one uncomfortable conversation.
The asymmetry is stark enough to be worth stating plainly: filling the calendar is bounded (there are only five days in a week and you will want some of them) while the rate is not. Contractors default to chasing days because a booking feels like progress and a rate rise feels like a risk. The table above prices that instinct.
A worked example
$800 a day, 3 days a week, 6 weeks off, California
| Line | Working | Amount |
|---|---|---|
| Booked days | 3 × 46 weeks | 138 days |
| Revenue billed | $800 × 138 | $110,400 |
| Business expenses | −$6,000 | |
| Total tax (SE + federal + state) | −$32,045 | |
| Take-home | after expenses and tax | $78,355 |
| Hourly equivalent | $800 ÷ 8 | $100.00 |
| Weekly equivalent | $800 × 3 | $2400.00 |
Out of the $78,355 that survives, you still fund your own holiday, sick days, pension, and health cover — costs a salaried contract would carry for you. That is the comparison worth making before concluding a day rate is generous.
Who this is for
Contractors and consultants pricing a day, and anyone deciding between a day-rate contract and a salary. Use it with the booked-days figure from last quarter's invoices rather than the one you hope for — the difference between those two numbers is the difference between a plan and a wish.
What this does not account for
- Late payment. Booked and billed is not the same as banked; 60-day terms on a day-rate contract are a working capital problem.
- Agency or umbrella margins, which come off the top before you see the rate.
- Health insurance and retirement, which are not modelled in this mode — see the freelance hourly rate calculator, which does.
- Expenses reimbursed separately, such as travel billed on top of the rate.
- Federal tax credits. The child tax credit and other federal credits are not modelled — the dependents field feeds state exemptions only, so a filer with dependents will owe less federally than shown.
- Entity structure. This models a sole proprietor filing Schedule C.
- 5 states are modelled (California, Florida, Illinois, New York, Texas).
Sources and dates
Tax parameters come from the IRS and state revenue departments for tax year 2026, listed below with the date each was checked. The utilisation table is produced by running this page's engine once per booked-days figure rather than scaled from a single result, so the bracket effects in it are real. If a figure disagrees with your accountant, trust your accountant and let us know.
Questions people actually ask about this
What does a $800 day rate actually earn in a year?
It depends almost entirely on how many days a week you are booked, which is why the rate alone tells you so little:
- 2 days a week — 92 days, $73,600 billed, $56,881 after tax
- 3 days a week — 138 days, $110,400 billed, $78,355 after tax
- 4 days a week — 184 days, $147,200 billed, $99,062 after tax
- 5 days a week — 230 days, $184,000 billed, $119,274 after tax
The gap between two and five days is a factor of 2.5 on revenue. Two contractors quoting the identical rate can be earning wildly different livings, and the one who is fully booked rarely mentions that this is the actual difference.
How do I convert an hourly rate to a day rate?
Multiply by the hours in a billable day — usually 8, sometimes 7.5. On this example, $800 a day is $100.00 an hour and $2400.00 for a 3-day week.
Do not discount the day rate below the hourly equivalent as a "bulk" gesture. A booked day removes your ability to sell that day to anyone else, which is the opposite of a bulk discount — you are selling exclusivity, not volume.
Should I charge a day rate or an hourly rate?
Day rates suit work that occupies whole days and clients who want a predictable number. They remove the incentive for a client to audit your hours, and they protect you from the half-day that consumes a full day anyway once you account for context switching.
Hourly suits support, maintenance, and anything genuinely interruptible. The practical test: if a client asking for "just two hours" would in fact cost you the day, quote a day rate. See the freelance hourly rate calculator for the rate itself.
How much should I raise my rate versus finding more days?
Arithmetically they are equivalent — a 25% rate rise and a move from 3 to 3.75 booked days produce the same revenue. In practice they are not equivalent at all, because the extra days cost you time and the rate rise does not.
Going from 2 to 5 days here adds $62,393 of take-home and consumes 138 more working days a year. Raising the rate to reach the same place costs you nothing but the conversation. Almost every contractor under-invests in the second option.
Is a day rate contract better than a salary?
Compare the whole package rather than the headline. On this example the day rate bills $110,400 but leaves $78,355 after expenses and tax — and out of that you still fund your own holiday, sickness, pension, and health cover, none of which a salaried equivalent would ask you to pay.
The freelance hourly rate calculator solves the equivalent salary directly, which is the honest form of this comparison.
What counts as a booked day?
A day a client pays for. Not a day you worked — proposals, invoicing, admin, and the call that turned into an afternoon are all real work and none of them are booked. Contractors consistently overestimate this figure when planning and discover the truth only when the year's invoices are added up.
The reliable method is to look backwards: count the days you actually invoiced last quarter and divide by 13 weeks. Whatever that number is, use it here rather than the number you intend to hit.
Where these numbers come from
Rates last checked against the sources below on .
Rate schedule version 2026.1, effective .
- IRS Rev. Proc. 2025-32 — inflation adjustments for tax year 2026 retrieved 2026-08-02
- IRS Topic 751 — Social Security and Medicare withholding rates retrieved 2026-08-02
- IRS — COLA increases for dollar limitations on benefits and contributions retrieved 2026-08-02
- IRS Rev. Proc. 2025-19 — 2026 HSA and HDHP inflation adjustments retrieved 2026-08-02
- IRS Publication 15-T — Federal income tax withholding methods
- IRS Form 1040-ES — Estimated tax for individuals