Contractor take-home pay calculator
See exactly how much you'll take home as a UK limited company contractor. Enter your day rate and billable days, and this calculator shows your salary, dividends, tax paid, and net income for 2025/26 and 2026/27 — using the optimal salary/dividend split for your income level.
Figures are illustrative only, based on 2025/26 and 2026/27 HMRC rates and standard assumptions. They do not constitute financial or tax advice. Your actual position will depend on your specific circumstances — book a free call with AutoBooks for personalised guidance.
Calculate your take-home pay
Adjust the inputs — the results and summary update instantly.
Most contractors bill 200–230 days after holiday, illness and bench time.
Figures are illustrative only, based on 2025/26 and 2026/27 HMRC rates and standard assumptions. They do not constitute financial or tax advice. Your actual position will depend on your specific circumstances — book a free call with AutoBooks for personalised guidance.
This calculator assumes you are working outside IR35. If you are inside IR35, your take-home pay is calculated differently — closer to PAYE employment. Read our IR35 guide →
How this calculation works
As a limited company contractor operating outside IR35, you don't take all your income as salary. Instead, you use a salary-plus-dividends structure that is far more tax-efficient:
- A salary of £12,570 — set at the personal allowance, so you pay no income tax on it. It's also a deductible business expense that reduces your company's corporation tax. (A small amount of employer's National Insurance is due on the portion above the £5,000 secondary threshold.)
- Corporation tax is paid next. Your company pays corporation tax on its profit after salary, employer NI and any pension contributions — 19% on profits up to £50,000, tapering up to 25% above £250,000 via marginal relief.
- Dividends make up the rest. Whatever profit remains after corporation tax can be drawn as dividends. The first £500 is tax-free; the balance is taxed at dividend rates (8.75%/33.75% in 2025/26, rising to 10.75%/35.75% in 2026/27), which are lower than salary income tax rates and carry no National Insurance.
Your take-home is your £12,570 salary plus your dividends after dividend tax. This calculator applies the optimal split automatically.
What affects your take-home pay
- Day rate — the single biggest driver of your revenue and net income.
- Billable days — holidays, illness and time between contracts ("bench time") all reduce the days you actually invoice. Dropping from 230 to 200 days is a real cut to your take-home.
- Accountancy and business costs — deductible expenses lower your corporation tax. This tool assumes your monthly accountancy fee plus £500 of insurance/miscellaneous costs.
- Employer pension contributions — paid by the company before corporation tax, they reduce your CT bill and move money into your pension tax-efficiently.
- IR35 status — this calculator only applies if you are outside IR35.
This calculator assumes you are working outside IR35. If you are inside IR35, your take-home pay is calculated differently — closer to PAYE employment. Read our IR35 guide →
Worked example
Take a contractor on £500/day, working 220 billable days, paying £89/month in accountancy fees, with no pension contribution, using 2025/26 rates:
- Annual revenue: £500 × 220 = £110,000
- Allowable business costs: (£89 × 12) + £500 = £1,568
- Profit before salary: £110,000 − £1,568 = £108,432
- Salary: £12,570; employer NI on it: (£12,570 − £5,000) × 15% = £1,135.50
- Profit after salary & NI: £108,432 − £12,570 − £1,135.50 = £94,726.50
- Corporation tax (marginal relief): (£94,726.50 × 25%) − ((£250,000 − £94,726.50) × 3/200) ≈ £21,353
- Available for dividends: £94,726.50 − £21,353 ≈ £73,374
- Taxable dividends (after £500 allowance): £72,874 — £37,700 at 8.75% + £35,174 at 33.75%
- Dividend tax: ≈ £15,170
- Net dividends: £73,374 − £15,170 ≈ £58,204
- Total take-home: £12,570 + £58,204 ≈ £70,774 — an effective tax rate of about 34%.
Adding an employer pension contribution changes the picture: because the contribution is paid before corporation tax, a £15,000 contribution reduces your CT bill while moving money into your pension — increasing your total benefit even though your immediate cash take-home falls. Use the pension slider above to see the effect on your own numbers.
What to do next
AutoBooks includes salary and dividend optimisation as standard for every client — we calculate your optimal split each year and handle the filings that make it work. Full-service contractor accountancy is £89+VAT/month, all-in.
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