Day Rate Invoice Template UK — Free for Contractors & Freelancers (2026)
Working on a day rate? This guide explains how to invoice correctly as a UK day rate contractor or freelancer — with a free tool to create your invoice in minutes.
Create a free day rate invoice →
What Is a Day Rate Invoice?
A day rate invoice bills clients based on the number of days worked at an agreed daily rate. It's common for:
- IT contractors — developers, business analysts, project managers
- Consultants — strategy, finance, HR, legal
- Creative contractors — designers, filmmakers, photographers
- Engineers and technical specialists
- Interim managers
Instead of billing by project or fixed price, you charge a daily or half-daily rate multiplied by the number of days worked.
What to Include on a Day Rate Invoice
A valid UK day rate invoice needs:
- Your name/company name and address
- Client name and address
- Invoice number — unique and sequential (e.g. INV-023)
- Invoice date
- Payment due date
- Description — e.g. "Consultancy services, 8 days @ £500/day"
- Day rate and number of days
- Subtotal
- VAT — if you're VAT registered (include your VAT number)
- Total amount due
- Payment instructions — bank details or payment link
Day Rate Invoice Example
Here's how a typical day rate invoice line item looks:
| Description | Days | Day Rate | Amount | |---|---|---|---| | Senior Developer — Sprint 12 (March 2026) | 18 days | £550/day | £9,900 | | | | Subtotal | £9,900 | | | | VAT (20%) | £1,980 | | | | Total Due | £11,880 |
How to Calculate Your Day Rate Invoice
Day rate invoice total = Number of days × day rate
If you're VAT registered:
- Net total = Days × day rate
- VAT = Net total × VAT rate (usually 20%)
- Invoice total = Net total + VAT
Example: 12 days at £400/day
- Net: 12 × £400 = £4,800
- VAT (20%): £960
- Total: £5,760
Do Contractors Have to Charge VAT?
VAT is only required if you are VAT registered. You must register if your taxable turnover exceeds £90,000 in any rolling 12-month period (2026 threshold).
Many contractors voluntarily register for VAT to appear more professional, even if below the threshold.
If you operate via an umbrella company or limited company, VAT registration may be handled through that entity — check with your accountant.
IR35 and Day Rate Invoicing
If you contract through a limited company, be aware of IR35 rules. If your engagement falls inside IR35, the client may be responsible for deducting PAYE and National Insurance from your fees before you invoice.
Your invoice format doesn't change under IR35, but the gross amount you receive may differ. Consult a specialist IR35 accountant if you're unsure.
How to Create a Day Rate Invoice with Billdrop
- Open the invoice builder at billdrop.app/invoice-builder
- Add your details — name, company name, address, bank details
- Add client details
- Add a line item — description (e.g. "Consultancy services"), quantity (number of days), rate (your day rate)
- Add VAT if registered — select 20% or enter a custom rate
- Set payment terms — due date
- Download as PDF — send directly to your client
The whole thing takes 2 minutes and produces a professional PDF.
Tips for Day Rate Contractors
Keep a timesheet. Even if your client doesn't require one, tracking days worked protects you in disputes.
Invoice promptly. Send your invoice at the end of each month (or at agreed milestones). Delaying invoicing delays payment.
Agree the rate in writing. Always confirm your day rate in a signed contract or email before starting work.
Include a purchase order number if your client requires one. Many large organisations won't process invoices without a PO reference.
Chase overdue invoices quickly. Contractors often have more leverage than they think — especially while still engaged on a project.
Frequently Asked Questions
Do I need to sign a contract before invoicing on a day rate?
A contract isn't legally required, but it's strongly recommended. Without one, proving your agreed rate becomes difficult in a dispute.
Can I charge a half-day rate?
Yes. Use 0.5 as your quantity. Most contractors bill in full or half days, though some bill in hours.
Should my day rate be inclusive or exclusive of VAT?
Always quote your rates exclusive of VAT (ex-VAT). State VAT separately on the invoice if you're VAT registered. This avoids confusion and is standard practice.
What payment terms should I use as a contractor?
30 days is standard for UK B2B. However, many contractors negotiate 14 or even 7 days, particularly for large corporates with slow accounts payable processes.
Create Your Free Day Rate Invoice
Billdrop is the fastest way to build a professional UK day rate invoice. No account. No subscription. Download PDF instantly.
Billdrop is a free invoice generator built for UK freelancers, contractors, and small businesses.