Day Rate to Salary Calculator 2026/27
Updated for the 2026/27tax year · Last updated
Enter your day rate and estimated billable days per year to see your annual gross income and take-home pay after income tax and National Insurance. Useful for benchmarking a contractor rate against a permanent salary, or for understanding what you actually earn net of tax.
Contractor day rates and permanent salaries are not directly comparable numbers. A £400/day rate sounds very different from a £60,000 salary, but calculating the annualised income and then the tax position reveals the real comparison. The key variables are billable days — the number of working days in a year after accounting for holidays, public holidays, and time between contracts — and the effective tax rate on the income.
A realistic estimate for UK contractors is 200–225 billable days per year. The tax year has approximately 260 working days. Subtract 20–25 days for holiday entitlement (contractors typically benchmark to an equivalent of 28 days including bank holidays), 5–10 days for illness or unavoidable downtime, and 5–20 days for gaps between contracts or business development time. The resulting 200–225 billable days is a realistic planning figure for most experienced contractors, though this varies significantly by sector and working style.
When comparing a day rate to a permanent salary, also factor in what a permanent employee receives in addition to their salary: employer pension contributions (typically 3–5%), employer National Insurance (15% on earnings above £9,100), holiday pay, sick pay, and other benefits. The total employer cost of a £60,000 salary is typically £70,000–£75,000, so a day rate should exceed the salary-equivalent before it genuinely compensates for the loss of permanent employment benefits.
Annual take-home
£67,978
Monthly take-home
£5,665
| Gross (day rate × days) | £99,000 |
| Income tax | − £27,031 |
| National Insurance | − £3,991 |
| Take-home | £67,978 |
Equivalent permanent salary: £99,000/year gross. A permanent role typically includes benefits (employer NI, pension, holiday) worth 20–30% on top of salary.
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How this calculator works
The calculator converts your day rate to annual income and then applies 2026/27 HMRC rates to calculate take-home pay:
Annual gross: Day rate multiplied by your billable days per year. This is your total contract income before any tax deductions.
Income tax: Applied at 2026/27 rates — 0% on the first £12,570 (personal allowance), 20% on £12,571–£50,270 (basic rate), 40% on £50,271–£125,140 (higher rate), and 45% above £125,140 (additional rate). The personal allowance tapers for income above £100,000, creating a 60% effective marginal rate between £100,000 and £125,140.
National Insurance: Employee Class 1 NI at 8% on earnings between £12,570 and £50,270, then 2% above the upper earnings limit. This calculation assumes direct employment or an inside-IR35 position. For outside-IR35 limited company income, the actual NI position is different (director salary plus dividends, with NI only on the salary portion) — use the IR35 Calculator to model the limited company structure.
Take-home: Gross annual income minus income tax minus National Insurance. Displayed annually and as a monthly equivalent for easy comparison against a salary offer. Note that this does not include any pension contributions, student loan deductions, or other adjustments that would apply in a full employment calculation.