Contractor vs Permanent Calculator
Compare your true net take-home as a contractor against a permanent employee role. Find your break-even day rate.
Contractor Details
Permanent Role Details
e.g. pension, health, bonus, holiday pay
Contracting puts
£12,335 more/year
£1,028/month advantage · Contracting wins
Contractor (Ltd Co)
35.4% rateAnnual Revenue£115,000
Corporation Tax-£23,267
Dividend Tax-£16,962
Net Salary (no tax)£12,570
Take-Home£74,292
£6,191/month
Permanent Employee
28.8% rateGross Salary£80,000
Income Tax-£19,432
Employee NI-£3,611
Benefits (added back)£5,000
Total Comp.£61,957
£5,163/month
Break-Even Day Rate
The minimum day rate needed to match the permanent role's total compensation of £61,957:
Break-even rate
£389.87
per day (5d/week, 46wk/year)
Your rate of £500.00/day exceeds break-even by £110.13. Contracting is financially advantageous.
Contractor assumes Ltd Co outside IR35, optimal £12,570 salary, no business expenses, all profits as dividends. 2025/26 rates. Does not account for holiday pay, sick pay, employer pension, or other hidden benefits of employment.