Work out Your Day Rate
A day rate is the amount of gross income you make per day based on a contract or salary. It is an important figure to calculate if you are considering switching jobs, writing a salary history or calculating a proposal. In order to calculate your day rate, you will need to gather your tax, salary or contract documents. You can figure out your day rate manually with a calendar and a calculator. You can compare these daily rates to other jobs or average daily rates in your field. This article will tell you how to work out your day rate.
Steps
- Gather the financial documents that detail the money you have made on a particular job. This can include your pay stubs, tax documents and/or signed contracts.
- Calculate the total amount paid for the work you did. Remember to include commission, if that is part of your yearly salary. Generally, a day rate is calculated according to the gross income, and it does not factor in taxes, 401 K contributions or medical savings accounts.
- Taxes vary from state to state and country to country. If you are attempting to figure out how your daily rate competes against a national or state average, it is especially important to work with gross salary rates.
- Figure out the number of days you worked on the job. For a standard, 5-day, work week and salaried job, you would multiply 5 times 52, the number of weeks in the year. Modify the result, 260, based on any un-paid work days.
- Divide your contract or salary total by the number of days you worked. For example, if you received $45,000 and worked 260 days, your day rate would be $173 per day.
- Imagine you are working as a freelancer and you were paid $7,000 for a project that lasted 3 months. If you worked 5 days per week, you would multiply 5 times 12 (weeks) to get 60 total working days. Divide $7,000 by 60 to get your $116.67 day rate.
- Repeat this process with other positions you have held to get a good idea of your salary history.
Tips
- You can also go online to try to work out your daily or hourly rate. Some sites, such as nyc.gov/html/opa/html/getting_paid/payrate_calculator.shtml and us.thesalarycalculator.co.uk/hourly.php provide a pay rate calculator.
- If you already know your hourly pay rate, then multiply it by the hours you work per day to find out your day rate.
- If you need to calculate day rates for a proposal, then you should begin by calculating your costs, researching average salaries for the work you are doing and taking into account your salary history. Freelanceswitch.com/rates can help you to calculate your hourly and daily rate.
Things You'll Need
- Payment slips
- Calculator
- Tax documents
- Calendar
- Daily rate calculator (optional)
