A worked example
A builder who wants £40,000 a year before tax works 5 days a week and takes 4 weeks’ holiday plus 8 bank holidays. They lose about 10 days to weather, illness and gaps between jobs, and spend about 12 days pricing jobs and collecting materials. That leaves 210 days they can bill, not 260. The van, fuel, tools, insurance, phone, accountant and cards cost about £12,900 a year. So they need to bill £52,900: £252 a day, or £31.50 an hour over an 8-hour day. After Income Tax (£5,486) and Class 4 NI (£1,645.80), they keep about £32,870.
How it works
Billable days are the weeks you work times the days a week, less bank holidays, the days you lose and the days spent on things you can’t charge for. Your day rate is what you want to earn plus your yearly costs, divided by those days, rounded up to the pound and before VAT. If you put in a take-home figure, we work out the profit you’d need before Income Tax and Class 4 National Insurance, using the 2026–27 rates for England, Wales and Northern Ireland. It assumes building is your only income. It’s an estimate, not tax advice, so check your own tax with your accountant. Scotland’s Income Tax rates are different.
The break-even rate is what you’d charge just to cover the costs, with nothing left for you.
Questions builders ask
How do I work out my day rate as a builder?
Add what you want to earn in a year to what the business costs to run, then divide by the days you can actually bill. Most people divide by too many days. Holidays, weather, illness, gaps between jobs and time spent quoting all come off.
How many days a year can a builder bill?
Fewer than most people think. Five days a week for 48 weeks is 240 days, but after bank holidays, bad weather, illness, gaps between jobs and time spent quoting and collecting materials, somewhere around 200 to 215 is common.
Should my day rate include VAT?
Work it out before VAT. If you’re VAT registered, you add 20% on top when you invoice and pay it over to HMRC. If you’re not registered, you don’t add VAT.
How does CIS affect my day rate?
As a CIS subcontractor, the contractor takes 20% (or 30% if you’re not registered) off the labour you invoice and pays it to HMRC. It’s tax paid in advance and comes off your tax bill, so it isn’t a cost and you don’t put your rate up for it. You just get less cash in hand each week, which the calculator shows.
Day rate or a price for the job?
Plenty of builders price whole jobs, but you still need a day rate to build the price from, and to know afterwards whether the job paid. Treat the day rate as your floor. If a job’s price works out at less per day than your rate, it isn’t paying you.
Written by Tomasz Kurpanik, a builder and the founder of Bricken. Tax figures from GOV.UK: Income Tax rates and self-employed National Insurance, 2026–27.