Hong Life CalculatorsUnderstanding the freelance rate with paid leave — concept and principle
An employee is paid on vacation days, sick days and public holidays; a freelancer is not. If you simply copy an employee's hourly pay, every day off silently becomes a pay cut. This calculator finds the hourly rate you need on the days you actually work so that, over a full year, you earn the same as an employee who is paid for those days off. Use it when setting a first rate or leaving a salaried job. It works with any currency.
How it is calculated
The calculator assumes a standard year of 260 working days (52 weeks × 5 days).
- Unpaid days = vacation days + sick days + public holidays
- Billable days = 260 − unpaid days
- Rate covering unpaid days = employee-equivalent hourly pay × 260 ÷ billable days
- Uplift = 260 ÷ billable days − 1
The hourly pay is in your currency per hour; all the other inputs are counted in working days (weekdays), not calendar days.
The principle
An employee's yearly pay is spread over all 260 workdays, including the paid days off. Your yearly income has to come only from the days you bill. The same money divided by fewer days means a proportionally higher rate: rate × 260 = new rate × billable days. The uplift does not depend on the hourly pay at all, only on how many days you take off, so 41 days off always means an 18.72% increase whatever your field.
Worked example
- Inputs: hourly pay $40, vacation 25 days, sick days 6, public holidays 10.
- Unpaid working days = 25 + 6 + 10 = 41.
- Billable days = 260 − 41 = 219.
- Rate = 40 × 260 ÷ 219 = $47.4886, shown as $47.49 per hour.
- Uplift = 260 ÷ 219 − 1 = 0.18721, shown as 18.72%.
How to read the result
The result is the minimum hourly rate that only replaces paid leave. Treat it as a floor, not a final price. For scale: 30 days off needs about 13%, 50 days about 24%. A freelancer also pays for what an employer normally covers, such as employer social contributions, pension, health cover, equipment and unpaid admin and sales hours, so real rates usually sit well above this figure.
Common mistakes
- Counting public holidays that fall on weekends; only weekday holidays reduce billable days.
- Planning zero sick days. Illness happens, and a realistic buffer protects your income.
- Assuming every working day is fully billable; admin and sales time are unpaid too.
- Starting from gross salary per hour without adding the employer's extra costs.
Frequently asked questions
Why 260 days and not 365?
365 days minus 104 weekend days is 261, and 52 weeks × 5 days is 260. Using working days keeps the comparison with an employee's paid workdays fair.
Can I use daily rates instead of hourly?
Yes. The ratio 260 ÷ billable days applies to any time unit, so multiply your employee-equivalent day rate by the same uplift.
Should the uplift also cover months without clients?
Gaps between projects are a separate risk. You can include expected idle days in the vacation field, which raises the rate accordingly.
Sources: U.S. Bureau of Labor Statistics, Employer Costs for Employee Compensation (ECEC)