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
About This Calculator
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 to use this calculator
- 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.
Also known as
Frequently Asked Questions
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Last updated: 1 April 2026 · Rates for 2025/26 tax year