How to calculate your freelance day rate
The most common mistake freelancers make is dividing their target salary by 260 working days. This ignores tax, super, holidays, sick days, and the cost of running a business — which means most freelancers significantly undercharge.
The right approach starts with your gross income target, then works backwards through all the costs and non-billable time.
Step 1 — Know your target take-home
Start with the salary you want to receive after tax. In Australia's 2024–25 tax year, a $100,000 gross salary takes home around $73,000. Your freelance rate needs to cover that tax gap on top of your income target.
Step 2 — Add superannuation
As a freelancer you pay your own super. The current Super Guarantee rate is 12%. Include it in your rate or you're effectively forfeiting retirement savings.
Step 3 — Count your real billable days
A standard year has 260 weekdays. Subtract:
- 4 weeks annual leave (~20 days)
- 10 public holidays
- 5–10 sick or personal days
- 10–20 days non-billable (admin, proposals, gaps between contracts)
That leaves roughly 200–215 truly billable days per year. Most freelancers overestimate this number.
Rate examples by income target (Australia 2026)
| Salary Target | Billable Days | Buffer | Min Day Rate | Recommended |
|---|---|---|---|---|
| $80,000/yr | 200 | 50% | $600/day | $720/day |
| $100,000/yr | 200 | 50% | $750/day | $900/day |
| $120,000/yr | 200 | 50% | $900/day | $1,080/day |
| $150,000/yr | 200 | 50% | $1,125/day | $1,350/day |
| $200,000/yr | 180 | 60% | $1,778/day | $2,133/day |
Day rate vs hourly rate
Day rates work better for project-based work and reduce scope creep — once the day is booked, the client can't keep expanding what they ask for. Hourly suits consulting or advisory roles with variable hours.
As a general rule, divide your day rate by 7.5 (not 8) to get your hourly. No one is fully productive for a complete 8-hour day, and the small buffer is honest and protects you.
What the overhead buffer covers
The buffer in this calculator accounts for the gap between what you earn as a freelancer and what you keep. For a typical Australian freelancer, a 50% buffer breaks down roughly as:
- Income tax — marginal rates up to 45% plus Medicare levy
- Superannuation — 12% of earnings (if paying yourself super)
- Business overhead — insurance, software, equipment, accounting
- GST obligations — if registered for GST