UK contractor day rate calculator
Convert your contractor day rate to an equivalent salary. See take-home pay inside and outside IR35, plus limited company vs umbrella comparison.
Billable days per week
46 weeks accounts for holidays and gaps between contracts
= 230 working days · £103,500.00 gross contract value
Figures use 2025/26 England, Wales & Northern Ireland tax rates. Scottish income tax differs for salary income. Estimates only — excludes student loan, VAT, Benefits in Kind, spouse dividends, director loans, and accountancy-specific optimisation. Not regulated financial advice.
Your results
Take-home
£5,639.27
Effective day rate
£294.22
Per billable day (annual basis)
Retention rate
65.4%
Total contract value
£8,625.00
Where your contract value goes (annual)
- Take-home (65.4%)£5,639.27
- Income tax (13.1%)£1,132.44
- Corporation tax (20.1%)£1,733.29
- Accountancy fees (1.4%)£120.00
Which structure works best for you?
Umbrella Company
£5,140.97/mo take-home
Retention rate: 59.6%
- ✓ No admin hassle
- ✓ No accountancy fees needed
- ✓ Works inside or outside IR35
- ✗ Lower take-home
Limited Company
£5,639.27/mo take-home
Retention rate: 65.4%
- ✓ Higher take-home
- ✓ Tax-efficient dividend structure
- ✗ Requires accountant (~£120/mo)
- ✗ Outside IR35 contracts only
Monthly difference: +£498.30/mo with limited company
Annual difference: +£5,979.59/year with limited company
Equivalent permanent salary
£98,471
A permanent employee would need this gross salary to take home the same as you each month
Their monthly take-home
£5,823.95
If employed on contract gross
Your monthly take-home
£5,639.27
Contractor (your structure)
You earn 3.2% less per month as a contractor
Figures use 2025/26 England, Wales & Northern Ireland tax rates. Scottish income tax differs for salary income. Estimates only — excludes student loan, VAT, Benefits in Kind, spouse dividends, director loans, and accountancy-specific optimisation. Not regulated financial advice.
How does contractor take-home pay work in the UK?
Contractors are usually paid a day rate multiplied by billable days, minus time off and admin. Your structure — limited company or umbrella — and IR35 status determine how much tax you pay. Outside IR35, a limited company can pay a small director salary up to the National Insurance threshold and take remaining profits as dividends, with corporation tax on company profits first. Inside IR35, income is treated more like employment, often through an umbrella that deducts employer costs and runs PAYE.
Day rates can look higher than permanent salaries, but headline contract value is not take-home pay. Employer National Insurance, umbrella fees, corporation tax, and dividend tax all reduce what you keep. Comparing your contractor result to an equivalent permanent salary helps when negotiating rates or deciding whether to accept a contract. Use our take-home pay calculator for employed PAYE, and the mortgage amortisation calculator if you are planning to buy. Figures use 2025/26 England, Wales & Northern Ireland tax rates. Scottish income tax differs for salary income. Estimates only — excludes student loan, VAT, Benefits in Kind, spouse dividends, director loans, and accountancy-specific optimisation. Not regulated financial advice.