Why you can't divide your target income by 365
You are not paid for 365 days. You are not paid for 260 either. Weekends, holidays, bank holidays, illness, quoting, buying materials, chasing payments, servicing the van and doing the books all take days out — and none of them are invoiced.
Most sole traders end up with somewhere between 180 and 220 genuinely billable days a year. If you price as though you have 260, you are about 20% short before you start.
- Weekends and bank holidays.
- Holiday you actually want to take.
- Sick days — nobody pays them for you.
- Quoting, site visits and surveys.
- Travelling between jobs and to merchants.
- Admin: invoicing, chasing money, tax, insurance renewals.
Step 1 — Count your real billable days
Start at 365, take off weekends (104), bank holidays (8), the holiday you want (say 20 days) and a realistic allowance for sickness (5). That leaves around 228. Then take off the unbillable working days — quoting, admin and van maintenance often eat one day a week, which is another 40 or so.
That gives roughly 190 billable days. Use your own numbers rather than these, but be honest: optimistic day counts are the most common cause of underpricing.
Step 2 — Add up your annual business costs
These are the costs you carry whether or not you work. They have to be recovered across your billable days.
| Cost | Example annual figure |
|---|---|
| Van finance or depreciation | £3,600 |
| Fuel | £3,000 |
| Insurance (public liability, van, tools) | £1,200 |
| Tools and replacements | £1,500 |
| Phone, software and subscriptions | £600 |
| Accountancy | £600 |
| Marketing, website, workwear, training | £900 |
| Total overheads | £11,400 |
Step 3 — Add the income you want and the profit on top
Decide what you want to take out of the business before tax — say £45,000. Add your overheads (£11,400) and you need £56,400 of gross earnings from 190 billable days: £297 a day.
That is your break-even-plus-wages figure, not your price. Add profit on top — the money that funds quiet months, replacing a van, and growing. At 15% that becomes roughly £342 a day, which you would sensibly round to £350.
Remember tax and National Insurance come out of the income you pay yourself, so build in what your accountant tells you to set aside rather than treating the whole figure as take-home.
Step 4 — Sense-check it against your market
Your calculated rate is the floor, not a target to negotiate down from. If it looks high against local rates, the answer is usually to reduce costs, increase billable days or work in a better-paying niche — not to charge less than the job costs you.
Review the number at least once a year and whenever fuel, insurance or material costs move significantly.
Put it into practice
Do this in minutes with the Job Pricing & Profit Calculator
Save your day rate, overheads and margin defaults once, and every job you price uses them automatically — then compare quoted profit with what the job really made.
Sources & further reading
Common questions
- How many billable days should I use?
- Most self-employed tradespeople land between 180 and 220 once weekends, holidays, sickness, quoting, travelling and admin are removed. Track your own diary for a few months rather than guessing.
- Should my day rate include materials?
- No. Keep the day rate as your labour and overhead recovery, and price materials separately with their own markup. Mixing them hides which part of a job is actually making money.
- Is a day rate the same as an hourly rate?
- Not quite. An hourly rate suits short call-outs, but it rarely covers travel and setup on a half-day job, so most trades set a minimum charge as well.
- Do I charge the same rate for every customer?
- Your floor should be the same. What changes is scope, risk and complexity — awkward access, tight deadlines or specialist work justify a higher rate, not a lower one.
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