Contractors are typically quoted a daily rate, but it can be hard to compare this with a permanent salary. This calculator converts your day rate into an equivalent annual salary, so you can see how a contract compares to a permanent role.
How the Conversion Works
The formula is: annual salary = day rate × working days per week × working weeks per year. A contractor on £400/day working 5 days/week for 46 weeks (allowing for holidays and gaps) earns £92,000 gross annually.
Don’t Forget the Overheads
A contractor’s day rate needs to cover items that employees receive for free: holiday pay, sick pay, pension contributions, insurance, and bench time between contracts. As a rule of thumb, a £400/day contract is roughly equivalent to a £55,000–£60,000 permanent salary when benefits are factored in.