UK Daily Rate Calculator
Convert your contractor day rate to annual, monthly, and weekly gross income.
Projected Gross Income
Understanding Your UK Daily Rate
For contractors and freelancers in the United Kingdom, converting a daily rate into an annualized salary equivalent is crucial for financial planning and comparing contract offers against permanent roles. Unlike a permanent employee, a contractor does not get paid for bank holidays, sick days, or annual leave.
How to Calculate Annual Income from a Daily Rate
The simplest formula to estimate your annual gross revenue is:
Daily Rate × Days per Week × Weeks Worked = Annual Gross
However, accuracy depends on the "Weeks Worked" variable. A standard year has 52 weeks (260 weekdays). In the UK, you must account for:
- Bank Holidays: Typically 8 days per year.
- Annual Leave: Most contractors plan for 20–25 days off.
- Sick Leave/Gaps: It is prudent to allow 5–10 days for illness or gaps between contracts.
Therefore, most professional contractors use 44 to 46 weeks as a realistic baseline for calculating annual turnover. If you calculate based on 52 weeks, you will likely overestimate your actual take-home pay.
Permanent Salary Equivalent
A common mistake is comparing a daily rate directly to a permanent salary. A contractor needs a significantly higher daily rate to match a permanent package because the daily rate must cover:
- Employer pension contributions (often 3-10% in perm roles).
- Paid holiday and sick pay.
- Job security and redundancy protections.
- Company benefits (healthcare, bonuses).
As a rule of thumb, many UK recruiters suggest that a permanent salary of £50,000 is roughly equivalent to a daily rate of £250–£300, depending on the industry and IR35 status.
Inside vs. Outside IR35
This calculator provides your Gross Revenue. Your net take-home pay will depend heavily on your IR35 status:
- Outside IR35: You can operate through a Limited Company, paying yourself a small salary and dividends, which is generally more tax-efficient.
- Inside IR35: You are taxed similarly to an employee (PAYE), often via an Umbrella company. You should expect to retain roughly 55-65% of your gross rate after taxes and fees.