How to calculate your freelance day rate

Your day rate (TJM, taux journalier moyen, in French) is the price of one billed working day. A badly calculated day rate is the most expensive mistake when starting out: too low, it forces you to work more to earn less than planned. Here is a simple method, in four steps.

The formula

Day rate = (target net income + business costs) ÷ (1 − charge rate) ÷ billable days

This is exactly what our day rate calculator does: you can follow this guide with the tool open next to it.

Step 1 — Set your target annual net income

Start from what you want to pay yourself over the year, after contributions and income tax. Also think about what an employee receives without seeing it: paid holidays, health insurance, supplementary pension, training. As a freelancer, all of this is on you.

Step 2 — Estimate your really billable days

A year has about 227 working days, once weekends, public holidays and 5 weeks of holiday are removed. But you will not bill all of these days: prospecting, admin, training, gaps between two assignments and sick days use up part of them.

Most freelancers bill between 180 and 220 days a year. When starting out, go for a cautious assumption.

Step 3 — Take your charges into account

In a French micro-entreprise, social contributions are a percentage of your turnover. For a liberal profession, they amount to about a quarter of your turnover. The exact rate depends on your activity and the year: check it on the Urssaf website for auto-entrepreneurs. Add income tax (on the progressive scale, or the flat-rate withholding if you opted for it) and the professional training contribution.

In total, a charge rate of 25 to 35% of turnover is a common assumption for a service micro-entreprise. For a company, the calculation is different: have it checked by your accountant.

Step 4 — Add your business costs

Software, equipment, professional insurance, accountant, phone, travel, training… List them over a year. Even small, these costs must be covered by your day rate.

Worked example

• Target net income: €40,000
• Business costs: €2,000
• Charge rate: 30%
• Billable days: 200

Turnover needed: (40,000 + 2,000) ÷ (1 − 0.30) = €60,000

Day rate: 60,000 ÷ 200 = €300

With 180 billable days instead of 200, the day rate rises to €333. The number of billable days is often the most underestimated parameter.

Beyond the calculation

• The market: compare your result with the rates charged in your field and at your level of experience. The calculation gives a floor. The market and the value you bring set the ceiling.
• Clients abroad: rates vary from country to country. Set your price in the client’s currency if that is the norm, and take exchange costs and payment times into account.
• The micro-entreprise threshold: check that the turnover you need stays below your scheme’s turnover threshold.
• Review your day rate every year, or as soon as your charges or goals change.