Use these pages to convert a day rate into an annual salary equivalent (based on 230 working days) and estimate monthly take-home pay.
The standard UK contractor benchmark converts a day rate to annual salary using 230 working days — calculated as 261 weekdays minus approximately 8 bank holidays minus 15–20 days holiday. Some contractors use 220 days (more holiday) or 240 days (less holiday); the convention affects the implied annual salary and should be agreed when comparing contractor and permanent packages.
| Day rate | Annual (220 days) | Annual (230 days) | Annual (240 days) | England monthly net (230) |
|---|---|---|---|---|
| £200/day | £44,000 | £46,000 | £48,000 | ~£2,978 |
| £300/day | £66,000 | £69,000 | £72,000 | ~£3,855 |
| £400/day | £88,000 | £92,000 | £96,000 | ~£4,851 |
| £500/day | £110,000 | £115,000 | £120,000 | ~£5,530 |
| £600/day | £132,000 | £138,000 | £144,000 | ~£6,201 |
| £800/day | £176,000 | £184,000 | £192,000 | ~£7,698 |
Monthly net figures use England PAYE rates at 230-day annual equivalent, tax code 1257L, NI category A, no student loan or pension. PAYE is an inside-IR35 / employed equivalent — outside-IR35 limited company take-home will be higher for the same day rate.
Outside IR35 — limited company: The contractor invoices through a personal service company (PSC). The company pays corporation tax (19% on profits up to £50,000 under the small profits rate, or 25% main rate above £250,000) and the director typically takes a low salary (around the NI secondary threshold of £9,100 or personal allowance of £12,570) plus dividends. Dividends are taxed at 10.75% (basic rate), 35.75% (higher rate) or 39.35% (additional rate), with a £500 dividend allowance. The combined tax burden is typically lower than PAYE for the same income.
Inside IR35 — deemed employment: Where a contract falls inside IR35, the fee-payer (typically the end client or recruitment agency) must deduct PAYE Income Tax and National Insurance before paying the contractor. The take-home figures shown in each day-rate page use PAYE calculations — these represent the inside-IR35 (or straightforward employment) equivalent.
When comparing a contractor day rate against a permanent salary offer, the contractor must also account for the absence of employer pension contributions (minimum 3% under auto-enrolment), paid holiday, sick pay and other benefits that a permanent employee receives. A common adjustment is to reduce the contractor's annual equivalent by 15–20% to get a like-for-like comparison with a permanent salary.