Most new contractors price from their old salary and discover the shortfall a year later.
The calculation
1. Target take-home income for the year
2. Divide by realistic billable days — 200 to 220, not 260
3. Add 25-35% for tax, software, hardware, insurance, sick days and the weeks between clients
4. That is your floor
Quote above the floor
The floor is where you break even, not where you should sit. Rates below it feel busy and end the year with nothing saved.
Raise it with each renewal
Contract renewals are the natural point. A small annual increase compounds and is easier than a large jump every three years.
Common questions
How many billable days are realistic?
200 to 220 a year once you account for holiday, admin, sales time and gaps between contracts.
Should I charge hourly or daily?
Daily is simpler for longer engagements and discourages micromanagement of hours. Hourly suits short or unpredictable work.