When you were employed, a week off was a line in the HR system. Your salary arrived as usual, and nobody asked how the money for that week was earned. Go freelance and that quietly stops being true. A week on a beach is now a week with no invoices — and a week with a flu is exactly the same, except you didn’t choose it.
Most freelancers find this out the hard way: they set a rate that works when they’re billing every week, then discover that the year contains holidays, sick days, slow patches and public holidays, none of which anyone pays for. The fix isn’t to take less time off. It’s to make your rate pay for the time off in advance.
Freelance holiday pay has to come from your rate. Work the rate out from the weeks you’ll actually bill — usually 44 or fewer, not 52 — and the hours within them that are genuinely billable. Then move roughly 15% of every payment from a working week into a separate time-off pot, so holidays and sick days are already funded when they arrive.
Why dividing by 52 weeks underprices you
The most common way to set a rate is also the most dangerous: take the income you want, divide it by a full working year, and call the result your hourly rate. Say you want to earn $90,000. A “full year” of 40-hour weeks is 2,080 hours, so the rate comes out at about $43 an hour.
That number assumes you bill forty hours every single week of the year. You won’t. Nobody does — not even people with salaries, who get paid holidays, sick leave and public holidays on top. The 52-week calculation doesn’t just leave out your holiday; it leaves out every hour you spend on email, proposals, invoicing and finding the next client. It’s a rate for a year that doesn’t exist. How to set freelance rates covers the rest of the formula, including your business costs.
Count the weeks you’ll really work
Start from the calendar and subtract honestly. A reasonable first pass looks like this:
- Holiday: 4 weeks. Less than that and you’ll burn out; many people take more.
- Public holidays: about 2 weeks’ worth, depending on where you and your clients are.
- Sickness: 1 week. You won’t know when, but you’ll use it.
- Training, admin gaps and quiet spells: 1 week, at the very least.
That leaves 44 working weeks. Then be honest about the hours inside them. Billable hours are the hours you can actually charge to a client, and of a 40-hour week, perhaps 25 end up billable once you account for sales, admin and the unglamorous work of running a business. So the real number is 44 × 25 = 1,100 billable hours.
Now redo the sum: $90,000 ÷ 1,100 hours is about $82 an hour — nearly double the naive rate. Nothing about your work changed. You just stopped pricing as if you’d never be ill, never take a break, and never spend an afternoon writing a proposal. The freelance rate calculator runs the same sum with your own figures and adds tax on top.
These numbers are a starting point, not a rule. Your public holidays, how often you get ill, and how much of your week is really billable are all specific to you. Swap in your own figures — and if you’ve got a year of tracked time behind you, use that instead of a guess.
Fund the weeks off before they arrive
Pricing in time off only works if the money is still there when you take it. The trap is that the extra you earn during busy weeks feels like spare cash, and it gets spent long before the holiday comes round.
The cure is a separate pot. If you bill for 44 weeks and live for 52, then roughly 8 weeks out of every 52 — about 15% — of what you earn in a working week belongs to your future time off. Move that share into a dedicated account every time a client pays, alongside what you already set aside for taxes. Keeping it apart from your everyday money is the same discipline as separating business and personal finances. When you take two weeks off, you pay yourself from the pot, exactly as a salary would.
Sick days are the reason this matters most. A holiday you can plan around; a week in bed you can’t. A funded pot turns an unplanned week off from a cash-flow scare into a mild inconvenience — which is how it should feel.
How to tell clients you’re taking time off
You don’t need to explain your rate’s arithmetic to anyone. But you do need to tell clients when you’re away, well in advance and without apology: “I’m out from the 14th to the 25th. I’ll wrap up the current milestone before I go, and pick things up on the 28th.”
Clients deal with employees taking leave all the time. What unsettles them isn’t that you’re away; it’s finding out the day before, or discovering it when an email bounces. Plenty of notice, a clear handover point and a return date make a holiday a non-event.
Frequently asked questions
Do freelancers get paid holiday?
No — nobody pays a freelancer for time off unless the freelancer has built it into their rate. Statutory holiday and sick pay generally apply to employees, not to self-employed people billing clients, though the exact rules depend on your country and how your work is classified. In practice, your “holiday pay” is the share of each invoice you set aside for the weeks you don’t work.
Should I charge more for working over public holidays?
You can, as long as it’s agreed before the work starts. A premium for holiday or rush work is a reasonable way to price the time you’d otherwise have off, and clients who need you on those days usually understand why. Put the rate in your quote or terms rather than adding it to the invoice afterwards, so it never comes as a surprise.
What if I’m off sick for longer than a week?
A long illness will outrun a one-week sickness allowance, so it needs a bigger safety net than your time-off pot. That’s what a general cash buffer is for — building a financial buffer for your solo business covers how big to make one. Depending on where you live, income protection insurance may also be worth pricing up.
What should I do with time-off money I don’t use?
Leave it in the pot or move it into your buffer — don’t treat it as a bonus. A year with little illness is likely to be followed by one with more, and a pot that carries over makes the next unplanned week easier. If it keeps building up year after year, that’s a sign to take more of the time off you’ve already paid for.
Where Billable comes in
The honest version of this calculation depends on one number most freelancers have to guess: how many hours a week they really bill. Billable tracks it for you. Run the timer or log hours against each project, and after a few months you’ll know whether your week is 25 billable hours or 18 — which is the difference between a rate that funds your holidays and one that quietly doesn’t.
The finance dashboard then shows what’s been paid, what’s outstanding and what’s overdue, so you can see at a glance whether the money for next month’s time off has actually arrived. It’s free for your first active project, then one flat plan — no seats, no tiers, no per-user fees. Start tracking and price the year you really work.