Contractor take-home pay calculator
Work out what you keep from a day rate under each route. Here is the idea at three common rates. The free calculator in the app does the rest with your own numbers.
What a day rate becomes.
Pick a rate and an IR35 status to see how the same invoice turns into very different take-home.
- Umbrella company 59.8% kept£65,758 a year £5,480 a month
- Limited company 62.8% kept£69,082 a year £5,757 a month
- Sole trader 66.5% kept£73,111 a year £6,093 a month
Example for 2026/27, 5 days a week for 44 weeks, England, Wales and Northern Ireland. Limited company outside IR35 assumes a £12,570 salary, the rest paid as dividends and £1,800 of running costs. Umbrella assumes a £25 weekly margin. An estimate, not advice.
Run your own numbers in the appHow take-home is worked out
Start with what you invoice. Take off what the route costs you: an umbrella margin and employer National Insurance, or the running costs and corporation tax of a limited company, or the business expenses of a sole trader. Then take off income tax, and National Insurance where it applies. What is left is your take-home.
The share of the invoice you keep is your take-home efficiency. It is the quickest way to compare routes, because a higher day rate does not always mean a proportionally higher take-home.
The 2026/27 rates behind the examples
| Item | Rate or threshold |
|---|---|
| Personal allowance | £12,570, reduced by £1 for every £2 of income over £100,000 |
| Income tax | 20% to £50,270, 40% to £125,140, 45% above |
| Employee National Insurance | 8% from £12,570 to £50,270, 2% above |
| Employer National Insurance | 15% above £5,000 |
| Corporation tax | 19% up to £50,000, 25% above £250,000, with marginal relief between |
| Dividend tax | 10.75% basic, 35.75% higher, 39.35% additional, after a £500 allowance |
| Sole trader Class 4 NI | 6% from £12,570 to £50,270, 2% above |
Rates for England, Wales and Northern Ireland. Rules change, so check gov.uk for the current position.
What the examples leave out
- Pension contributions and student loan repayments.
- Expenses you can claim as a limited company or sole trader, beyond the running costs shown.
- VAT, which sits outside your income.
- Other income, which can change the tax you pay on this income.
Estimates only, not financial or tax advice. Use them to compare routes and ask better questions, not to file a return.
Questions, answered.
Is a limited company always better for take-home pay?
No. Outside IR35 and at higher rates it often leaves more, but it brings running costs, admin and responsibility. Inside IR35 the advantage largely disappears, because the contract is treated as employment.
Do these figures include VAT?
No. All figures are ex VAT. If you are VAT registered, the VAT you charge is not your income.
Which tax year do the numbers use?
2026/27, for England, Wales and Northern Ireland. Scottish income tax bands are different.
How accurate is it?
It is an estimate built on stated assumptions. Your real take-home depends on pension contributions, student loan repayments, expenses and your wider income. Check anything important with an accountant.
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