The short version
- Start from the take-home pay you want, not from what others charge.
- Count only the days you'll actually be paid for — usually about 210 to 225 a year, not 260.
- Add every yearly business cost, then the Income Tax and Class 4 NI on your profit.
- CIS doesn't change the rate you need; it changes when you pay the tax.
- Check your number against local going rates, then decide.
Why your day rate isn't your wage
An employee on £150 a day is paid for holidays and bank holidays, gets sick pay, has a pension topped up by their employer and uses the employer's van and tools. Their employer pays National Insurance on top.
When you're self-employed, all of that comes out of your day rate. So the question isn't "what's a fair day's pay?" but "what do I need to charge on the days I work to cover the whole year?"
Step 1: Decide your take-home pay
Start with what you want left after everything: your costs, your tax and your National Insurance. Be realistic. Think about your mortgage or rent, bills, family, and what you want to save, including for a pension and for a rainy-day pot.
Step 2: Count your billable days
There are about 260 weekdays in a year. You won't be paid for all of them.
| Days | |
|---|---|
| Weekdays in a year | 260 |
| Holiday (4 weeks) | − 20 |
| Bank holidays (England and Wales) | − 8 |
| Illness, rain, waiting for materials, gaps between jobs | − 10 |
| Billable days | 222 |
Many trades lose more than 10 days, especially outdoor work in winter or anyone between contracts. If last year you were paid for 200 days, use 200.
Step 3: Add up your yearly costs
List everything it costs to turn up and do the job. For a typical trade with a van:
| Cost | Per year |
|---|---|
| Van finance or lease | £3,600 |
| Fuel | £2,400 |
| Van insurance, tax, servicing and tyres | £1,000 |
| Tools, repairs and PPE | £600 |
| Public liability and tool insurance | £250 |
| Phone | £150 |
| Total | £8,000 |
These costs are also allowable expenses, so they reduce your taxable profit. See what expenses you can claim.
Step 4: Add tax and National Insurance
Tax is charged on your profit (turnover minus costs). In 2026/27 for England, Wales and Northern Ireland:
- Income Tax: nothing on the first £12,570 (Personal Allowance), 20% up to £50,270, 40% above.
- Class 4 NI: 6% on profits between £12,570 and £50,270, 2% above.
Scotland uses different Income Tax bands; National Insurance is the same.
Step 5: Divide by your billable days
Put it together and you have the turnover you need, and the day rate.
Worked example (2026/27, England)
Kate is a self-employed plasterer. She wants £35,000 take-home pay, has £8,000 of yearly costs and expects 222 billable days.
To take home £35,000 she needs a profit where profit minus tax and NI equals £35,000. That works out at a profit of £42,880.81:
- Income Tax: (£42,880.81 − £12,570) × 20% = £6,062.16
- Class 4 NI: (£42,880.81 − £12,570) × 6% = £1,818.65
- £42,880.81 − £6,062.16 − £1,818.65 = £35,000.00
Add back her costs: £42,880.81 + £8,000 = £50,880.81 turnover needed.
Divide by her billable days: £50,880.81 ÷ 222 = £229.19 a day, or about £28.65 an hour over an 8-hour day.
Put in your own take-home target, costs and days off to see the day rate you need, with all the working.
The reverse sum: what does my current rate leave me?
Suppose Kate is being offered £200 a day. Over 222 days that's £44,400 turnover. Take off £8,000 of costs and her profit is £36,400.
- Income Tax: (£36,400 − £12,570) × 20% = £4,766.00
- Class 4 NI: (£36,400 − £12,570) × 6% = £1,429.80
- Take-home: £36,400 − £6,195.80 = £30,204.20
So the £200 rate leaves her about £4,800 a year short of her target. Knowing that number makes it easier to decide whether to push for more, cut costs or take the work anyway.
How CIS fits in
If Kate works through CIS and is registered, the contractor takes 20% of her labour. On £200 a day that's £40, so she receives £160. It feels like a pay cut, but it isn't: the £40 is her tax paid in advance.
Over the year, 20% of £44,400 is £8,880 of CIS. Her actual bill is £6,195.80, so she'd expect around £2,684.20 back when she files. That's why many subbies get a refund, and why the CIS refund calculator is worth running every year.
Things that push your rate up
- Pension. Nobody else is paying into one for you. Even 5% of your profit makes a difference over a working life.
- Sick days and injuries. No sick pay, and some trades are hard on the body. Income protection insurance is another cost to build in.
- Unpaid time. Quoting, travelling, invoicing, chasing payment and picking up materials.
- Payment delays. If contractors pay 30 days after invoice, you need a cash buffer.
- Tax timing. If you have no CIS taken, you'll need to put money aside for tax and possibly make payments on account.
Check against the market
Once you know the rate you need, compare it with what others charge for similar work in your area. If you're well below the market, you may be underselling yourself. If you're well above it, look again at your costs and days, or at the type of work you take on. The sum tells you your floor, not your ceiling.
VAT
If your turnover goes over £90,000 in any rolling 12 months, you must register for VAT. At Kate's £229 a day that would take about 393 working days, so she's nowhere near. But at £400 a day over 225 days you'd reach £90,000, and materials you charge for count towards turnover too. Our VAT threshold tracker keeps an eye on it.
Questions people ask
What is a good day rate for a tradesperson?
It depends on your trade, area, experience and costs. The right day rate is one that covers your costs, tax and unpaid days and still leaves the take-home pay you need. Work that out first, then compare with what others in your area charge.
How many working days are there in a year?
About 260 weekdays. Take off holidays, bank holidays and days lost to weather, illness and gaps between jobs, and most self-employed tradespeople are paid for roughly 210 to 225 days.
Should I charge more than an employee earns?
Yes. An employee's employer pays for their holidays, sick pay, pension, tools, van and National Insurance. As a self-employed tradesperson you pay all of that yourself, so your day rate needs to be well above the daily equivalent of a wage.
Does CIS mean I should charge more?
No. CIS is an advance payment of your own tax, not an extra cost. It changes how much cash you receive each week, but not how much tax you pay over the year. If CIS takes more than you owe, you get the difference back.
Should my day rate include VAT?
Quote your rate before VAT. If you're VAT registered you add VAT on top where it applies. For many jobs for other VAT-registered builders, the domestic reverse charge means the customer accounts for the VAT instead.
Sources
Checked against GOV.UK on 21 October 2026. Rates and rules change, usually from 6 April, so we re-check every guide at least once a year.