Using a 230-day working year, £675/day maps to an annual gross equivalent of £155,250. Use this page to benchmark monthly take-home under standard UK payroll assumptions.
| Scenario | Monthly net | Annual net |
|---|---|---|
| England, no deductions | £7,786.70 | £93,440.40 |
| Scotland, no deductions | £7,295.54 | £87,546.52 |
| England + Plan 2 student loan | £6,835.85 | £82,030.20 |
| England + 5% pension (salary sacrifice) | £7,139.82 | £85,677.90 |
Assumptions: 230-day working year (£155,250 annual gross), tax code 1257L, NI category A. Scotland uses Scottish income tax bands. For your exact figures use the full calculator.
Contractors operating outside IR35 through a limited company are not subject to PAYE on their day rate income. Instead, the company pays corporation tax (19% on profits up to £50,000, or 25% on profits above £250,000) and the director extracts income as a combination of low salary (typically around the NI secondary threshold of £9,100 or the personal allowance of £12,570) and dividends. Dividends are taxed at 8.75% (basic rate), 33.75% (higher rate) or 39.35% (additional rate), with a £500 dividend allowance.
For contractors inside IR35, the end client (or the fee-payer) deducts PAYE and NI as if the contractor were employed. The take-home figures on this page assume straightforward PAYE (employed-equivalent) calculations — they are the benchmark figure. A well-structured outside-IR35 limited company arrangement will typically produce higher net income at the same day rate, with the difference growing at higher earnings.
The comparison below illustrates the approximate take-home difference between PAYE (inside IR35 equivalent) and a limited company (outside IR35) for £675/day, assuming 5% accountant fee of gross income and a minimum salary/dividend extraction:
This page converts £675/day to an annual gross of £155,250 using 230 working days. This is a standard benchmark (52 weeks × 5 days − 10 bank holidays − 15 days holiday) used by contractors to compare day rates against permanent salaries. Alternative conventions exist — some use 220 days or 240 days — so always confirm which basis your comparison uses.
At £675/day, the equivalent weekly rate is £3,375 and the monthly equivalent is approximately £12,938 gross. A permanent role paying the same gross salary will typically include employer pension contributions (minimum 3% under auto-enrolment) and statutory benefits not included in a day rate, which should be factored into any comparison.
The standard contractor benchmark is 230 working days (261 weekdays minus 8–10 bank holidays minus 15–20 holiday days). Some calculations use 220 days (allowing more leave) or up to 240 (minimal leave). The choice materially affects the implied annual salary — at £675/day the range between 220 and 240 days is approximately £13,500 annual gross.
IR35 status depends on the working arrangement, not the rate level. Key tests include substitution rights, control over working methods and mutuality of obligation. Day rate contractors operating through a limited company need to assess each contract separately. HMRC provides the CEST (Check Employment Status for Tax) tool for guidance. If inside IR35, a deemed employment calculation applies and PAYE tax is deducted as if employed — producing take-home broadly in line with the figures on this page.
If you are employed or operate inside IR35, employee NI applies at 8% on the annualised earnings between £12,570 and £50,270, then 2% above that. Outside IR35 through a limited company, the company pays employer NI on any salary the director takes. Dividends are not subject to NI. This NI saving is one of the main reasons contractors historically used limited companies, though the advantage has reduced as dividend tax rates have increased.