What your day rate
really takes home
Turn a day rate into a year's income and see what it leaves you as a sole trader, a limited company, or inside IR35.
£88,000
£400 a day for 220 billable days, before tax and expenses.
A full-time year is about 232 working days after statutory leave. Take off sickness, training and gaps between contracts: 200 to 220 is typical.
Equipment, software, insurance and travel you pay for yourself.
Accountancy and other company costs. Used for the outside IR35 figure only.
A month
£7,333
An hour
£53.33
Take-home a year
- Sole trader (most)
- £60,611
- Limited company, outside IR35
- £57,418
- Inside IR35
- £55,318
To take home as much on a PAYE salary you would need about £86,300 a year, before counting holiday pay, sick pay or an employer pension, which a day rate does not include.
Estimates for 2026/27 at UK rates. Whether a contract is inside IR35 depends on the working arrangement, not on your choice: see the IR35 calculator for how each figure is built.
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</p>- Day rate
- What a contractor or freelancer charges for one working day. It has to cover the holidays, sick days, gaps between contracts, pension and costs that an employer would pay for on a salary.
From a day rate to a year
Multiply the day rate by the days you will actually bill. A full-time year is about 232 working days once the 5.6 weeks of statutory leave come out, but nobody bills every one: sickness, training, admin and the gap between contracts all come out of the same days. 220 is a common planning figure; a new contractor between clients may bill far fewer.
What each day rate leaves you
Take-home a year at 220 billable days, with £3,000 of expenses and £1,500 of company running costs, for 2026/27:
| Day rate | A year | Sole trader | Limited company | Inside IR35 |
|---|---|---|---|---|
| £200 | £44,000 | £33,608 | £31,271 | £31,537 |
| £300 | £66,000 | £47,851 | £46,922 | £44,223 |
| £400 | £88,000 | £60,611 | £57,418 | £55,318 |
| £500 | £110,000 | £71,971 | £67,807 | £66,414 |
| £650 | £143,000 | £86,740 | £82,386 | £78,057 |
Limited company figures assume a salary up to the Personal Allowance with the rest taken as dividends, outside IR35. Inside IR35, the fee is paid through the fee-payer’s payroll after employer National Insurance.
Setting a day rate against a salary
Dividing a salary by 260 working days undersells you. Start from the take-home you want, add what an employer would have paid on top (pension, holiday and sick pay, equipment and training), and spread it over the days you can realistically bill. The calculator shows the PAYE salary that would take home as much as your best route, which is the fairest single comparison.
Sole trader, limited company or inside IR35
As a sole trader you pay income tax and Class 4 National Insurance on your profit. Through your own limited company, outside IR35, the company pays corporation tax and you draw a small salary and dividends. If a contract is inside IR35, the client decides that from the working arrangement, and the fee is taxed much like employment. The IR35 calculator and the limited company or sole trader calculator go deeper on each.
- A year at a day rate is the rate times the days you actually bill, not the days in the year.
- About 232 working days are available; 220 billed is a common planning figure.
- The same day rate leaves different take-home as a sole trader, a limited company or inside IR35.
- Compare a day rate with a salary on take-home, after counting what an employer would add.
Related calculators
Frequently asked questions
How do I convert a day rate to an annual salary?
Multiply the day rate by the days you will bill in a year. At £400 a day for 220 days that is £88,000 before tax and expenses. That is income, not a salary: a salary also carries holiday pay, sick pay and an employer pension.
How many days a year does a contractor work?
There are about 232 working days in a year after 5.6 weeks of statutory leave. After sickness, training and gaps between contracts, many contractors bill around 200 to 220.
What day rate matches my salary?
Work from take-home, not gross. The calculator shows the PAYE salary that takes home as much as your day rate does; add the pension, holiday pay and equipment an employer would provide before you compare.
Is it better to contract as a sole trader or a limited company?
At higher day rates a limited company outside IR35 usually leaves more, but it adds running costs and admin, and the gap closes inside IR35. The calculator shows all three on your numbers.
Contracting as a sole trader?
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Get started freeWhere these figures come from
Rates from GOV.UK.