Contractor vs Employee Calculator
Compare your take-home pay as a PAYE employee vs a contractor operating through a limited company. Includes IR35 considerations.
Your daily contract rate
Days worked per year
Comparable permanent role salary
Is it better to work as a contractor or an employee in the UK?
Contractor vs Employee Calculator is designed specifically for UK businesses and individuals. All calculations use current 2025/26 rates and follow HMRC guidelines.
Completely free with no signup required. Results are instant and calculated in your browser — no data is sent to our servers. For significant financial decisions, consult a qualified UK accountant or financial adviser.
How do you use the Contractor vs Employee?
- 1Enter a contract day rate (or annual contract value) alongside a comparable permanent salary. The calculator models take-home pay for both scenarios, accounting for employer costs, pension, holiday pay, and limited company tax.
- 2Contracting through a limited company typically nets 20–30% more than a comparable salary, but the gap narrows once you account for employer pension contributions, sick pay, holiday pay, and the cost of accountancy.
- 3The calculation assumes you are outside IR35. If you are inside IR35, your take-home pay as a contractor will be much closer to — and sometimes lower than — employment. Use the IR35 calculator to model the inside-IR35 scenario.
Use alongside
Pair this tool with our other free calculators: Ecommerce Profit Calculator, IR35 Calculator.
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Last updated: 1 April 2026 · Rates for 2025/26 tax year