Contractor day rate calculator 2026/27

For an engagement your client has determined inside IR35: turn a day rate into a yearly figure and see what it leaves after income tax and National Insurance, which whoever pays you deducts through PAYE. We do not put a figure on an umbrella, and we say why.

Your day rate as take-home pay

£5,824.00

a month, from £103,500 a year, taxed as pay through PAYE.

Take-home67.5%Income tax28.5%National Insurance4.0%

The 6 weeks a year you are not working are already in this figure. A day rate has to cover them, which is why it is higher than a salary that pays the same over a year.

This is the figure for an engagement your client has determined inside IR35, where the client is a public authority or a medium or large company. Those are the off-payroll working rules of Chapter 10, and under them whoever pays you operates PAYE on the rate, which is what this page works out. If your client is a small private company the rules are Chapter 8 instead, the figure is worked out from your own company’s accounts for the whole year, and we do not have those — so this page cannot answer for that case and does not try.

At £450 a day	A year	A month
Billed before tax	£103,500	£8,625.00
Income tax	£29,532.00	£2,461.00
National Insurance	£4,080.00	£340.00
You take home	£69,888.00	£5,824.00

By rate

Day rates over 46 working weeks

Day rate	A year before tax	Take-home a year	A month	Kept
£350	£80,500	£57,247.96	£4,770.66	71.1%
£450	£103,500	£69,888.00	£5,824.00	67.5%
£550	£126,500	£78,832.04	£6,569.34	62.3%
£700	£161,000	£97,117.04	£8,093.09	60.3%

What is missing

Umbrella deductions and IR35

The assignment rate is not your gross pay

An agency usually quotes the rate it pays the umbrella company, not the pay that reaches your payslip. Out of it come the employer’s National Insurance, the apprenticeship levy, holiday pay and the umbrella’s margin, and only what is left becomes your gross pay. The order and the treatment of those deductions is the rule we are waiting on, and every one of them makes the take-home figure smaller.

The same is true of an engagement inside IR35 through your own company, where a deemed payment is worked out at the year end. Until both methods are sourced and checked twice, this page prices the rate as ordinary PAYE pay: correct if that is how you are paid, and an upper bound if you are paid through an umbrella.

Rules v2026.18 · checked against GOV.UK on 18 September 2026Two independent checks on every rate · 393 of 418 hand-verified cases, all passing, beside 43,041 generated · How we calculate · Changelog

Payroll-grade

Questions

Common questions

What is a day rate worth a year?

At £450 a day, 5 days a week for 46 weeks, the rate comes to £103,500 a year. Taxed as pay in England, that leaves £69,888.00, or £5,824.00 a month. The 6 weeks you are not working are already out of that figure, which is why a day rate has to be higher than a salary that pays the same.

Why does my umbrella payslip show less than this?

Because the rate an agency quotes is usually the assignment rate, and an umbrella company takes its costs out of it before you are paid: employer National Insurance at 15%, the apprenticeship levy, holiday pay and its own margin. Those deductions are not on our verified list yet, so this page does not model them and the figure above is what the rate is worth as ordinary PAYE pay.

What about working outside IR35?

An engagement outside IR35 through your own company is taxed differently again, with corporation tax on the profit and tax on whatever you take out of it. Neither the corporation tax rules nor the deemed payment calculation for an inside-IR35 engagement is verified here yet, so this page takes no view on which route leaves you better off.

SourcesIncome Tax rates and Personal Allowances — GOV.UK Rates and thresholds for employers — GOV.UK