# Day Rate to Salary Calculator UK 2026/27

> Convert a contractor day rate to an annual salary: £400 a day is £88,000 over 220 working days. See take-home after tax and NI for 2026/27, a day rate table, and salary to day rate.

Working as a contractor and wondering how your day rate stacks up against a permanent
salary? Enter your rate and we'll convert it into an equivalent annual salary — so you can compare like for
like. This contractor day rate calculator converts a day rate into an annual salary and take-home equivalent, so you can compare a contract against a permanent role.

A day rate is not comparable to a salary until you account for unpaid time off, business costs, employer National Insurance and the tax you will pay. This converter turns a contractor day rate into a salary-equivalent and after-tax take-home figure, so you can compare a contract against a permanent role fairly.

## From day rate to annual salary

The starting calculation is day rate × billable days. A contractor rarely works 260 days a year — holiday, sickness, bank holidays, gaps between contracts and unpaid admin typically bring the realistic figure to around 220–230 billable days. At £500 a day for 220 days, gross revenue is £110,000 before any costs. The calculator above uses 5 days a week for 46 weeks (230 days) by default; change the weeks to match your own plans.

## Day rate to annual salary table

Annual figures at 220 and 230 billable days, with take-home worked out as if the 220-day amount were a PAYE salary in 2026/27 (England, Wales and Northern Ireland, tax code 1257L, no pension or student loan).

These are PAYE figures. Inside IR35 through an umbrella company you take home less, because employer National Insurance, the apprenticeship levy and the umbrella margin come out of the day rate first. Outside IR35 through a limited company, the result depends on how you split salary and dividends — see the [IR35 calculator](https://salarycal.co.uk/ir35-calculator/) and [dividend tax on contractor income](https://salarycal.co.uk/dividend-tax-calculator/).

## Salary to day rate (the reverse)

To turn a salary into a day rate, divide it by your billable days. Salary ÷ 220 is the break-even day rate before you cover holiday, pension and the other costs an employer would normally pay:

As a rough rule, a contract needs to pay 25–30% more than these break-even rates to match the benefits of a permanent role. To compare against an hourly job instead, use the [hourly rate to salary](https://salarycal.co.uk/hourly-wage-calculator/) calculator.

## Costs a salary already covers

As a contractor you fund things an employer would normally pay for: accountant fees, insurance, software, equipment, training, and your own pension. You also receive no paid holiday, no sick pay and no employer pension contribution. That is why a contract needs to pay roughly 25–30% more than an equivalent salaried role just to break even.

## The IR35 question

Whether you can operate through a limited company — and take income as dividends — depends on IR35. If a contract falls inside IR35, the day rate is taxed broadly like salary, and the take-home drops sharply. Always model both, and compare a [sole trader vs limited company](https://salarycal.co.uk/sole-trader-vs-ltd/) set-up if you are outside IR35.

Convert your day rate above, then compare structures with our [IR35 calculator](https://salarycal.co.uk/ir35-calculator/).

## Frequently asked questions

### What is £400 a day as an annual salary?

£400 a day is about £88,000 a year over 220 billable days, or £92,000 over 230. Taxed as a PAYE salary, £88,000 leaves £61,597.40 a year take-home in 2026/27.

### How many days a year does a contractor work?

Usually 220 to 230 billable days: 260 weekdays minus about 25 days of holiday, 8 bank holidays and some sickness or gaps between contracts.

### How do I work out a day rate from an annual salary?

Divide the salary by your billable days, for example £50,000 ÷ 220 = £227.27 a day. Then add about 25–30% to cover holiday, pension and gaps between contracts.

### Is the take-home figure right for an umbrella or inside-IR35 contract?

No. The calculator treats the whole amount as a PAYE salary. Umbrella deductions such as employer National Insurance, the apprenticeship levy and the umbrella margin lower it, so use the IR35 calculator to compare.