Convert your daily rate into gross and net annual income estimates.
£
Standard is 44-48 weeks (allowing for holidays)
%
Est. 30-40% for typical Ltd/Umbrella mix
Total Billable Days:–
Gross Weekly Income:–
Gross Monthly Income:–
Gross Annual Income:–
Estimated Tax Deductions:–
Est. Net Annual (Take Home):–
Est. Net Monthly (Take Home):–
function calculateIncome() {
// 1. Get Inputs
var dayRateInput = document.getElementById("dayRate").value;
var daysPerWeekInput = document.getElementById("daysPerWeek").value;
var weeksPerYearInput = document.getElementById("weeksPerYear").value;
var taxRateInput = document.getElementById("taxRate").value;
// 2. Parse Numbers
var dayRate = parseFloat(dayRateInput);
var daysPerWeek = parseFloat(daysPerWeekInput);
var weeksPerYear = parseFloat(weeksPerYearInput);
var taxRate = parseFloat(taxRateInput);
// 3. Validation
if (isNaN(dayRate) || dayRate <= 0) {
alert("Please enter a valid daily rate.");
return;
}
if (isNaN(daysPerWeek) || isNaN(weeksPerYear) || isNaN(taxRate)) {
alert("Please check your weeks, days, and tax rate inputs.");
return;
}
// 4. Calculations
// Total days worked in a year
var totalBillableDays = daysPerWeek * weeksPerYear;
// Gross Calculations
var grossAnnual = dayRate * totalBillableDays;
var grossMonthly = grossAnnual / 12;
// Weekly is based on the billable weeks usually, but standard accounting often averages it over 52 weeks
// However, contractors think in billable weeks. Let's show average weekly income over the year (52 weeks)
var grossWeeklyAvg = grossAnnual / 52;
// Tax Calculations (Estimation)
var taxDeduction = grossAnnual * (taxRate / 100);
var netAnnual = grossAnnual – taxDeduction;
var netMonthly = netAnnual / 12;
// 5. Formatting (GBP Currency)
var formatter = new Intl.NumberFormat('en-GB', {
style: 'currency',
currency: 'GBP',
minimumFractionDigits: 0,
maximumFractionDigits: 0,
});
// 6. Display Results
document.getElementById("resTotalDays").innerHTML = totalBillableDays + " days";
document.getElementById("resGrossWeekly").innerHTML = formatter.format(grossWeeklyAvg);
document.getElementById("resGrossMonthly").innerHTML = formatter.format(grossMonthly);
document.getElementById("resGrossAnnual").innerHTML = formatter.format(grossAnnual);
document.getElementById("resTax").innerHTML = "-" + formatter.format(taxDeduction);
document.getElementById("resNetAnnual").innerHTML = formatter.format(netAnnual);
document.getElementById("resNetMonthly").innerHTML = formatter.format(netMonthly);
// Show the results container
document.getElementById("resultsArea").style.display = "block";
}
Guide to Contractor Day Rates in the UK
Understanding how your daily rate translates into an annual salary is crucial for contractors, freelancers, and consultants in the UK. Unlike permanent employees, contractors do not receive paid holidays, sick pay, or employer pension contributions by default. Therefore, a higher daily rate is required to offset these missing benefits and the instability of contract work.
How to Calculate Your Equivalent Salary
Many new contractors make the mistake of simply multiplying their day rate by 260 (the standard number of working days in a year). However, this is rarely accurate. To calculate a realistic gross annual income, you must account for:
Bank Holidays: There are typically 8 bank holidays in the UK where you likely won't bill.
Personal Leave: You need to account for your own holidays (e.g., 20-25 days).
Sick Days & Gaps: It is prudent to budget for potential sick days and gaps between contracts.
A more realistic formula, used in our calculator above, typically assumes between 44 and 48 billable weeks per year.
Inside vs Outside IR35
Your "Take Home" (Net) pay is heavily influenced by your IR35 status:
Outside IR35: You operate as a genuine business. You can pay yourself a small salary and take the rest as dividends, which is generally more tax-efficient. You may also claim legitimate business expenses.
Inside IR35: You are classed as a "disguised employee" for tax purposes. You will likely be paid via PAYE or an Umbrella company. Your day rate is subject to Income Tax and National Insurance (both employee and employer contributions) at source, resulting in a lower net retention, often around 55-65% of the gross rate.
Determining Your Market Rate
When setting your day rate, consider the "contractor premium." Because you have no job security or benefits, your day rate should generally be 30% to 50% higher than the daily breakdown of a comparable permanent salary. For example, if a permanent role pays £60,000 (£230/day), a contractor equivalent might look for £350+ per day to match the lifestyle and risk profile.
Common Day Rate Conversions
Below are some rough approximations based on a 46-week working year:
£200/day: Approx. £46,000 Gross Annual
£350/day: Approx. £80,500 Gross Annual
£500/day: Approx. £115,000 Gross Annual
£750/day: Approx. £172,500 Gross Annual
Use the calculator above to get precise figures based on your specific working schedule and tax situation.