Contractor day rate calculator

Find out what a day rate is worth once umbrella company costs, tax and National Insurance are taken off.

Uses 2026/27 employer NI (15% above £5,000) and the 0.5% apprenticeship levy, both paid out of your assignment rate.

How umbrella pay works

When you work inside IR35 through an umbrella company, the agency pays your full day rate to the umbrella. Before your salary is calculated, the umbrella deducts its own costs: its margin, employer’s National Insurance and the apprenticeship levy. What’s left becomes your gross salary, which is taxed through PAYE like any other job.

That’s why a £500 day rate is worth much less than £500 × working days. Use this calculator to compare contract offers, or to compare a contract with a permanent salary using our take-home pay calculator.

Holiday pay

Many umbrellas hold back about 12.07% of your pay as accrued holiday pay and pay it when you take time off. It’s still your money, so the annual totals above include it.

Frequently asked questions

What is a £500 day rate as a salary?
At 46 weeks a year, £500 a day brings in £115,000. Through an umbrella that becomes a gross salary of about £99,420 and take-home pay of about £68,221 a year.
Does this work for outside IR35 limited companies?
No. This calculator is for inside IR35 umbrella pay. Limited company take-home pay depends on how you split salary and dividends, your expenses and Corporation Tax, so speak to a contractor accountant.

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