Freelance business
Freelance day rate from a salary
Turn an employee salary into the day rate a contractor needs, after benefits, overhead and unpaid days.
Day rate = (salary x (1 + benefits value) + yearly overhead) / billable days. An $80,000 salary with benefits worth 20% and $300 a month of overhead, billed over 200 days, needs a day rate of $498, not the $307.69 you get from dividing by 260 weekdays.
Your numbers
Result
Worked example
Salary $80,000. Benefits at 20% add $16,000 and overhead of $300 a month adds $3,600, so you need $99,600 of revenue. Divide by 200 billable days: $498 a day, or $66.40 an hour over a 7.5-hour day. Salary divided by 260 weekdays is only $307.69, so the contractor rate is 1.62 times higher.
How it works
The tool grosses the salary up for benefits and overhead, then spreads the total over only the days you can bill. Most freelancers do not bill all 260 weekdays: holidays, sick days, admin and finding work all take days. If you are unsure how many days you can bill, use the billable hours calculator.
The 20% benefits figure is a placeholder, not a published standard. Replace it with the real value of what your employer pays for you (health plan, pension match, paid leave). It also does not include income tax.
Sources and basis (checked 2026-10-08): arithmetic on the numbers you enter. No published rates, tax rules or benchmarks are built in; any figure described as a rule of thumb is labelled as one. This is a planning estimate, not financial, tax or legal advice.
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FAQ
How do I convert a salary to a day rate?
Divide salary plus the cost of benefits and overhead by the days you can actually bill. For $80,000, 20% benefits, $300 a month overhead and 200 billable days the day rate is $498.
Why is a contractor day rate higher than salary divided by 260?
A salary pays for holidays, sick days and benefits and for time spent not billing. A contractor funds those themselves and can only bill some of the days, so the same income needs a higher day rate. In the example the multiple is 1.62.
How many days can a freelancer bill?
It varies a lot. 200 is a common planning assumption, not a published standard. Work it out from your own holidays, leave and admin time with the billable hours calculator.
Does this include tax?
No. The result is revenue before income tax. Use the take-home pay calculator to see what is left after a tax rate you enter.