Most freelancers quote an hourly rate based on vibes.
"£50/hour sounds about right."
Cool. But are you actually earning £50/hour? Because once you account for all the unpaid hours — the admin, the quoting, the invoicing, the chasing, the marketing — your real rate tells a very different story.
The maths nobody wants to do
Say you charge £50/hour and bill 25 hours a week.
That's £1,250/week gross. Decent.
But you also spend:
- 5 hours on admin (invoicing, bookkeeping, emails)
- 3 hours on marketing/networking
- 2 hours chasing unpaid invoices
- 2 hours on quotes and proposals
- 1 hour on professional development
So you're actually working 38 hours for that £1,250.
Real hourly rate: £32.89.
That's a 34% pay cut you gave yourself.
It gets worse
We haven't factored in:
- Tax (20-40% depending on your bracket)
- National Insurance (6-9%)
- Business expenses
- Holiday (you're paying yourself nothing for 4-5 weeks a year)
- Sick days (£0)
- Pension (you're contributing, right? ...right?)
After all that, your £50/hour rate is probably delivering about £18-22/hour of actual take-home.
Which is fine — if you know that going in. Most people don't.
How to fix it
1. Track everything. Not just billable hours. Track admin, marketing, chasing. You need the real number.
2. Price for the real number. If you want £50/hour real, you need to charge £75-80/hour billed.
3. Reduce unpaid hours. Automate invoicing. Use templates for proposals. Set up payment terms that actually get you paid.
4. Stop doing £10/hour work. If you're spending 3 hours a week manually formatting invoices, that's insane. Use a free invoice template and move on.
Calculate yours
We built a day rate calculator that works backwards from your target salary, factors in holidays, expenses, and tax, and tells you what to actually charge.
There's also a self-employed tax calculator if you want to see how much of your gross actually survives.
The number will probably depress you. But at least you'll stop undercharging.
What's your real hourly rate? Have you ever calculated it properly?
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