Unpaid Time Off Calculator

The cost nobody quotes for

An employee on a salary takes five weeks off and is paid for all of it. The money comes from the same place it always did, and nothing about the arrangement draws attention to itself. A freelancer on an equivalent headline rate takes the same five weeks and earns nothing for any of them — while the software subscriptions, the insurance and the phone bill carry on exactly as before.

That difference is not a small adjustment. Holiday, public holidays and a realistic allowance for illness together remove around six to seven weeks from a working year, which is more than an eighth of it. A rate built on 52 weeks of work is therefore wrong by roughly 15 percent before any other consideration, and the shortfall does not announce itself in month three. It announces itself when you decline a holiday you had earned because the timing felt financially impossible.

What the funded rate is doing

The headline figure is the hourly rate at which your remaining working weeks generate the same income they would have generated across a full year, plus the overhead that kept running while you were away. In other words, it is your current rate with the employer-paid-holiday part put back in.

Clients never see this. They see one number, exactly as an employer's customers never see a line for staff annual leave. Pricing time off into the rate is not a surcharge; it is how every business that gives its staff holiday has always worked.

Public holidays and where you work

It is worth entering public holidays properly rather than rounding them away. Most markets have between eight and fourteen days when clients are closed, approvals stall and nothing moves — Eid al-Fitr and Eid al-Adha in Saudi Arabia and the wider Gulf, national days, Christmas and New Year across Europe and the Americas. If your clients are in one region and you are in another, you effectively lose both sets, which is a detail that catches out a lot of people working across borders.

Making time off actually happen

• Book it first. Put the dates in the calendar at the start of the year and treat them as unavailable when quoting. Time off that waits for a quiet month never arrives, because the quiet month is when you panic about income.
• Tell clients early. Two or three weeks' notice turns your absence into an ordinary scheduling fact. Two days' notice turns it into a problem you caused.
• Invoice before you go. Deliver, invoice, then leave. Chasing payment from a beach is not a holiday, and a 14-day term started before you left clears roughly when you are back.
• Fund it from the reserve, not from optimism. Set aside the weekly cost figure above each month and the break is already paid for before it starts.

One last point, and it is the practical one: unfunded time off does not get skipped indefinitely. It gets taken eventually, usually at short notice, usually because you are exhausted or unwell, and usually at a much worse moment than the one you would have chosen. Pricing it in is cheaper than the alternative in every sense.