You want to earn £60,000 per year as a freelance consultant. What should you charge per hour?

Your Goal

Desired take-home: £60,000/year

This is what you want in your pocket after taxes, overhead, and all business costs.

Your Availability

Billable hours per week: 20 hours

You work 40 hours per week, but only half is client-facing billable work. The rest is:

Holiday weeks: 4 weeks

You'll take 4 weeks off per year (you deserve it).

Working weeks: 52 - 4 = 48 weeks

Total billable hours per year: 20 × 48 = 960 hours

Your Business Overhead (Monthly)

Software and tools: £150

Professional insurance: £80

Coworking space: £250

Website and marketing: £120

Phone, internet: £50

Accounting/legal: £100

Equipment, upgrades: £50

Total per month: £800

Annual overhead: £800 × 12 = £9,600

Running the Calculation

Pre-tax requirement:

£60,000 (income) + £9,600 (overhead) = £69,600

With 30% tax buffer:

£69,600 × 1.30 = £90,480

This accounts for income tax and National Insurance at roughly 30% effective rate.

Hourly rate needed:

£90,480 ÷ 960 hours = £94.25/hour

Round up to £95/hour or £700/day (8-hour day).

Does This Make Sense?

Let's verify:

Annual revenue: 960 hours × £95 = £91,200

Tax (30%): £91,200 × 0.30 = £27,360

After-tax revenue: £91,200 - £27,360 = £63,840

Minus overhead: £63,840 - £9,600 = £54,240

Wait, that's only £54,240, not £60,000!

The Fix: Increase Buffer to 35%

Let's recalculate with a 35% tax buffer to be safer:

With 35% buffer:

£69,600 × 1.35 = £93,960

New hourly rate:

£93,960 ÷ 960 = £97.88/hour

Round to £100/hour or £750/day.

Verification:

960 × £100 = £96,000 revenue

35% tax = £33,600

After tax = £62,400

Minus £9,600 overhead = £52,800

Still short! The issue is that 30-35% might not be enough for self-employment taxes.

The Real Calculation (Accurate)

Let's work backwards:

To net £60,000:

Round to £120/hour or £900/day.

Why Such a High Rate?

You might think "£120/hour is crazy, that's £249,600 if I worked 40 hours/week!"

But you don't bill 40 hours. You bill 20.

Employee equivalent:

£60,000 salary = £30/hour (2,000 work hours)

Your £120/hour × 20 billable/week = £2,400/week

52 weeks = £124,800 revenue

Minus tax and overhead ≈ £60,000 take-home

Employee COST to company:

£60,000 salary + employer NI (13.8%) + benefits = £72,000-£75,000

So £120/hour for 20 billable hours is roughly equivalent to a £60k employee, which costs the company £72k-£75k.

Adjusting for Experience

Junior (1-2 years): £120 × 0.7 = £85/hour

Mid-level (3-5 years): £120/hour (as calculated)

Senior (5-10 years): £120 × 1.3 = £156/hour

Expert (10+ years): £120 × 1.8 = £216/hour

The Lesson

To earn £60k take-home as a freelancer, you need a rate much higher than the equivalent employee salary. This accounts for:

Use the calculator to find your real target rate.