Contractor Calculator
Enter your day rate to see your estimated annual and monthly take-home pay as a UK contractor, with comparisons between IR35 status and PAYE.
What would your take-home pay be as a contractor? This calculator estimates your annual and monthly income based on your day rate, IR35 status, and working pattern.
Compare the financial difference between working outside IR35 through a limited company, inside IR35, or through an umbrella company. This is an estimate — always consult an accountant for your specific situation.
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What this calculator does
This calculator estimates your take-home pay as a UK contractor. It factors in your day rate, working pattern, IR35 status, expenses, pension contributions, and student loan repayments. It also provides a comparison between different working arrangements.
Who it is for
IT contractors, freelancers, consultants, and anyone considering contract work who wants to understand the financial implications of different working arrangements.
How to use it
Enter your day rate, working days per week, and weeks per year. Select your IR35 status or umbrella arrangement. Add any monthly expenses and pension contribution. Click to see your estimated take-home pay with comparisons.
How the calculation works
For outside IR35 (limited company), we model an optimal salary/dividend split. Salary is set at the NI threshold (£12,570), with remaining profits taken as dividends after corporation tax (19%). For inside IR35 and umbrella, deemed salary rules apply with employer’s NI deducted from the gross amount.
Worked example
At £450/day, 5 days/week, 46 weeks/year (outside IR35): Annual gross = £103,500. Optimal salary = £12,570. Dividends (after corp tax) = approximately £73,653. Estimated annual take-home = approximately £78,500. Inside IR35: approximately £65,500.
Assumptions and limitations
- This is an estimate only — tax planning for contractors is complex
- Outside IR35 uses a simplified salary/dividend model
- Corporation tax at 19% (small profits rate)
- Dividend tax rates: 8.75% basic, 33.75% higher, 39.35% additional
- Does not account for VAT, flat rate scheme, or IR35 determination complexities
- Employer’s NI uses 13.8% above the secondary threshold
- Always consult a specialist contractor accountant
Frequently asked questions
How much will I take home on a £500 day rate?
On a £500 day rate working 5 days/week for 46 weeks (outside IR35), your estimated annual take-home is approximately £85,000-£90,000 depending on expenses and pension. Use this calculator for a personalised estimate.
What is the difference between inside and outside IR35?
Outside IR35, you operate through your own limited company and choose how to pay yourself (typically salary + dividends). Inside IR35, you are treated as an employee for tax purposes, and tax/NI is deducted from your gross pay after employer’s NI.
Is contracting worth it compared to a permanent job?
Contractors typically earn more gross pay but lose benefits like sick pay, holiday pay, pension contributions, and job security. The take-home comparison depends on your specific day rate and permanent salary alternative. Use this calculator’s PAYE comparison to see the difference.
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Sources and references
IR35 legislation (https://www.gov.uk/guidance/understanding-off-payroll-working-ir35), Corporation tax rates (https://www.gov.uk/corporation-tax-rates), Dividend tax rates 2025/26 (https://www.gov.uk/tax-on-dividends)
Last updated
Last reviewed: 2025-04-10.