What does the Contractor Day Rate Calculator do?

Calculate the minimum day rate needed to achieve your target take-home pay. Inside and outside IR35. All calculations are performed in your browser using official UK rates and thresholds.

Is this suitable for my business?

This calculator provides general estimates based on standard UK business rates and rules. Every business is different — consult your accountant for advice specific to your circumstances.

Does this use 2025/26 tax rates?

Yes. All rates and thresholds are based on the current 2025/26 UK tax year. Corporation Tax main rate is 25% for profits over £250,000, with a 19% small profits rate.

Contractor Day Rate Calculator

Calculate the minimum day rate needed to achieve your target take-home pay. Inside and outside IR35.

Last updated: April 2026 · Source: GOV.UK — Off-payroll working

Target Annual Take-Home

Working Days/Year

Inside IR35 (taxed as employment)

Minimum Day Rate Needed

£345

Outside IR35 (Ltd company)

Annual Revenue

£75,000.00

Take-Home

£58,757.32

Disclaimer

This calculator is provided for informational purposes only and should not be considered as financial or tax advice. All calculations are performed locally in your browser — no personal data is collected or sent to our servers. Rates and thresholds are sourced from HMRC and GOV.UK and are updated for the current tax year. Always verify results with HMRC or consult a qualified professional before making financial decisions.

How It Works

Contractor day rates are the standard pricing unit in the UK contracting market. To convert a permanent salary to an equivalent day rate, the calculator divides the annual salary by the number of billable working days (typically 220-230 after deducting holidays, bank holidays and an allowance for bench time), then adds a premium to cover the loss of benefits and job security.

A common rule of thumb is to divide the salary by 1,000 for a basic day rate equivalent (e.g. £60,000 salary = £300/day). However, this does not account for employer NI savings, pension, sick pay, holiday pay and other benefits that contractors must fund themselves. A more accurate conversion adds 20-40% to cover these.

This calculator converts between salary and day rate in both directions. It includes options for operating through a limited company, umbrella company or PAYE agency, showing the take-home pay under each model. Enter either a salary or a day rate and see the equivalent under all three structures.

Example: £65,000 permanent salary to day rate

Working days per year (less 25 holiday, 8 bank hols): 227
Basic equivalent: £65,000 ÷ 227 = £286/day
With 30% contractor premium: £286 × 1.30 = £372/day
At £375/day through Ltd company: take-home approx. £58,000
At £375/day through umbrella: take-home approx. £49,500

Source: GOV.UK — Off-payroll working

Frequently Asked Questions

What does the Contractor Day Rate Calculator do?: Calculate the minimum day rate needed to achieve your target take-home pay. Inside and outside IR35. All calculations are performed in your browser using official UK rates and thresholds.
Is this suitable for my business?: This calculator provides general estimates based on standard UK business rates and rules. Every business is different — consult your accountant for advice specific to your circumstances.
Does this use 2025/26 tax rates?: Yes. All rates and thresholds are based on the current 2025/26 UK tax year. Corporation Tax main rate is 25% for profits over £250,000, with a 19% small profits rate.