What's in this guide
The mistake most tradespeople make.
Most day rates are set by looking at what the bloke down the road charges. £250 a day sounds about right. Done.
That's not a day rate. That's a guess dressed up as a decision.
Your day rate should be calculated from two things: what you want to take home, and what it costs to run your business. Everything else is someone else's number.
The maths that matters: if you want to take home £50,000 a year, and you can bill 200 days, your day rate needs to cover £50k take-home plus tax and National Insurance plus van, tools, insurance, fuel and admin. That's rarely less than £420 a day. Charging £280 because everyone else does is how tradespeople end up running out of money in December.
Start with the take-home figure you want.
Pick the number. What do you want in your bank at the end of the year after tax? £40,000? £50,000? £70,000?
Be honest. Not what you think you should want. What you actually want.
Now work backwards. UK self-employed tax for 2025/26 (rough guide, not tax advice):
- Personal allowance up to £12,570. 0% income tax
- £12,571 to £50,270. 20% income tax + 6% Class 4 NI
- £50,271 to £125,140. 40% income tax + 2% Class 4 NI
- Class 2 NI is only £3.45/week if profit over £6,725
If you want £50,000 take-home as a sole trader, you need profit of roughly £72,000 to £75,000. That's the number your day rate has to deliver, on top of overheads.
Working out your actual billable days.
Here's where the maths gets uncomfortable. 365 days minus weekends is 261. That is not your billable day count. Not even close.
| Starting point | Days |
|---|---|
| Weekdays in a year | 261 |
| Bank holidays | -8 |
| Holiday (4 weeks) | -20 |
| Sickness / bereavement | -5 |
| Admin, quoting, paperwork | -25 |
| Training / CPD | -4 |
| Downtime between jobs | -10 |
| Billable days per year | 189 |
Some people will bill 220. Some will bill 160. Be realistic. If you're quoting jobs on your phone at 6am and doing invoicing on a Sunday, the admin still counts. It's time you're not billing.
Overheads most people forget.
Add up your annual business costs. Every one of them.
| Item | Annual cost |
|---|---|
| Van lease or finance | £3,600 |
| Van insurance | £900 |
| Fuel | £3,000 |
| Tools and replacement | £1,200 |
| Public liability insurance | £350 |
| Professional indemnity | £250 |
| Trade body registration (Gas Safe / NICEIC) | £350 |
| Phone, software, accounting | £800 |
| Workwear, PPE, safety equipment | £400 |
| Training / certificates | £500 |
| Advertising / website | £600 |
| Total annual overheads | £11,950 |
These are ballpark figures. Your numbers will differ. Some will be higher (a newer van on PCP might be £6,000), some lower (if you own tools outright). Put your own numbers in.
Margin is not optional.
The mistake most self-employed tradespeople make is calculating just enough to survive. No margin for growth, no margin for mistakes, no margin for the quiet quarter.
Add 10 to 15% on top. That's your margin. That's what pays for the new van in 3 years, the bigger house, the week in Tenerife, the day off when your knee's playing up.
Worked example with numbers.
Let's put it all together for a self-employed plumber wanting £50,000 in the bank after tax:
| Component | Annual |
|---|---|
| Target take-home (after tax and NI) | £50,000 |
| Tax and NI (approx) | £22,500 |
| Required profit (gross) | £72,500 |
| Overheads | £11,950 |
| Required turnover before margin | £84,450 |
| Margin at 12% | £10,134 |
| Required annual revenue | £94,584 |
Divide £94,584 by 189 billable days.
£500 per day
That's your day rate. Not £300 because a mate charges that. £500 because the maths says so.
Get the full calculator spreadsheet, free.
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Get the free calculatorHow to check if your current rate is right.
Take your current day rate. Multiply by the number of days you actually billed last year (look at your invoices, be honest).
That's your turnover. Now subtract overheads. Then subtract tax. What's left is your take-home.
Is it the number you want?
If not, either your rate is too low, your billable day count is too low, or your overheads are too high. One of those has to move.
What to do next.
Run the numbers for your own business. Don't guess. Don't skip the overheads. Don't forget the margin.
If the new rate is £80 or £120 higher than your current rate, the next question is how to charge it without losing jobs. That's what the full Trade Pack is for. The proposal template, the follow-up sequence, and the pricing calculator are all designed to let you charge what you're worth.