Contractor Take-Home Pay Calculator
See your limited company take-home for 2026/27 in seconds.
Our contractor take-home pay calculator turns your hourly or daily rate into the full picture — director’s salary, expenses, corporation tax, dividends and your IR35 status — to show the net income that actually lands in your pocket each week.
Quick reference
What goes into your take-home.
Through a limited company, your contract income is taxed in stages before it reaches you as net income — here’s the journey.
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Your contract rate
Day / hour
Annualised from the rate and hours you actually work — this is your company’s turnover.
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Director’s salary
Tax-efficient
A modest salary first, usually around the National Insurance contributions threshold, then dividends on top.
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Business expenses
Deducted
Legitimate costs come off profit before tax — so they lower your bill.
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Corporation tax
19–25%
Charged on company profit, with marginal relief between £50k and £250k.
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Dividend tax
10.75%+
Paid personally on dividends above the £500 allowance, rising with your band.
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What lands with you
Take-home
Salary plus net dividends — the net income this calculator shows you per week.
Figures are for the UK 2026/27 tax year. Individual circumstances will vary — talk to us for a tailored view.
Calculation result
Calculated weekly net pay
£—
Where the money goes
- Annual income
- £—
- Director’s salary
- −£—
- Business expenses
- −£—
- Accounting fees
- −£—
- Taxable profit
- £—
- Corporation tax
- −£—
- Dividends paid
- £—
- Dividend tax
- −£—
Your annual take-home
- Net dividends
- £—
- + Salary you took
- +£—
- Annual take-home
- £—
that’s £— per week
Heads up: this assumes you draw every penny each year. Many contractors leave a reserve in the company and extract it later as capital — which can help minimise tax. We’ll cover that in the emailed breakdown.
Want this saved or shared? Pop in your name and email and we’ll send the full breakdown — plus a quick intro to our accounting service.
The method
How your contractor take-home pay is worked out.
Through a limited company, your hourly or daily rate becomes company turnover — then salary, expenses, corporation tax and dividends each take a slice before your take-home pay reaches you.
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1
Annualise your day rate. The calculator turns your day or hour rate and the weeks you work into your company’s yearly turnover.
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2
Take a tax-efficient salary. Most contractors pay a director’s salary around the National Insurance contributions threshold, then deduct legitimate business expenses from profit.
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3
Pay corporation tax on the profit. What’s left after salary and expenses is taxed at 19–25% corporation tax, with marginal relief in between.
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4
Draw the rest as dividends. Post-tax profit is paid out as dividends, with personal dividend tax on top — and your salary plus net dividends is the take-home pay shown above.
That’s exactly what this contractor calculator does — working out your take-home pay instantly, for the 2026/27 tax year.
Illustrative · 2026/27
A contractor on £500 a day, working around 46 weeks a year, outside IR35:
- Company income (day rate annualised)
- £115,000
- − Business expenses & accounting
- £4,300
- − Corporation tax (~22%)
- £22,000
- − Dividend tax
- £18,000
- Take-home pay a year
- ≈£70,700
Rounded for illustration and assumes you draw everything each year. Your exact take-home pay depends on your hourly or daily rate, expenses and IR35 status — pop your own figures into the contractor calculator above.
IR35 status
Inside or outside IR35 changes your take-home.
For tax purposes, IR35 is the rule that decides whether HMRC treats you as genuinely self-employed or as a ‘disguised employee’ who should pay employment income tax. Your IR35 status is the single biggest factor in a contractor’s take-home pay.
Outside IR35
You’re a genuine contractor operating outside IR35, so you can work through your own limited company and draw a tax-efficient salary plus dividends. This is the route the calculator above models — and where take-home pay is highest, typically around 75–80% of your contract rate.
Inside IR35
For tax purposes, HMRC treats the engagement like employment, so income tax and National Insurance contributions come off at source — usually through an umbrella company. Take-home pay is lower, often around 60–65% of your rate, and the limited-company dividend route no longer helps — our umbrella calculator shows the umbrella company figure.
Not sure which side of IR35 you fall on? It’s exactly the kind of thing we sort out for contractors every day — our qualified accountants and IR35 specialists can review your contract and working practices.
Three ways contractors keep more.
The rate is only half the story. How you draw it is the other half.
Get the salary/dividend mix right
A small salary up to the NI-free threshold, topped up with dividends, is usually the most efficient way to draw from a limited company.
Claim every legitimate expense
Real business costs come off profit before corporation tax, so each pound claimed is a pound that isn’t taxed. Keep clean records.
Don’t draw it all if you don’t need it
Leaving a reserve in the company and crossing a tax band on purpose — or extracting later as capital — can cut the total tax. We’ll model it.
Contractor take-home FAQs
Contractor take-home pay questions, answered.
The things UK contractors ask us most about working out take-home pay through a limited company in 2026/27.
How much take-home pay does a contractor get?
Outside IR35, working through your own limited company, most contractors keep roughly 75–80% of their contract rate after a director’s salary, expenses, corporation tax and dividend tax. Inside IR35 — usually paid through an umbrella company — take-home is closer to 60–65%. Enter your day or hour rate in the calculator above for your exact 2026/27 figure.
How do I calculate contractor take-home pay?
Annualise your day or hour rate into company turnover, deduct a tax-efficient director’s salary and business expenses, pay 19–25% corporation tax on the profit, then draw the rest as dividends and pay dividend tax on top. Salary plus net dividends is your take-home pay. Our contractor take-home pay calculator runs the whole calculation for you instantly.
Is it better to contract through a limited company or an umbrella?
If you’re outside IR35, a limited company is usually more tax-efficient because you can split income between a small salary and dividends. If you’re inside IR35, an umbrella company is simpler and the take-home works out much the same either way. Our umbrella pay calculator lets you compare the two.
How does IR35 affect my take-home pay?
IR35 decides whether you’re taxed as genuinely self-employed or as an employee. Outside IR35 you keep more by drawing a small salary plus dividends; inside IR35 you pay employment-level income tax and National Insurance, which can cut a contractor’s take-home by 10–15 percentage points.
What expenses can a contractor claim?
Genuine business costs — accountancy fees, business travel, equipment, software, professional insurance and salaries for any staff — are deducted from profit before corporation tax, so every pound claimed lowers your tax bill. Personal spending can’t be claimed.
How much salary should a contractor take?
Most limited company contractors pay themselves a small director’s salary around the National Insurance threshold and take the rest as dividends — usually the most tax-efficient mix. The calculator above assumes this approach.
Is this contractor calculator up to date for the 2026/27 tax year?
Yes — it uses the 2026/27 corporation tax, dividend tax and National Insurance rates. The figures are a guide, and your own circumstances can change the result, so talk to us for a tailored calculation.
More from Resources
While you’re here…
Dividend Tax Calculator
Work out the tax on dividends drawn from your limited company.
Corporation Tax Calculator
Estimate what your limited company owes after marginal relief.
Umbrella Pay Calculator
See your weekly or monthly take-home through an umbrella.
Salary Calculator
Check take-home on any salary — tax, NI and pension factored in.
Software
Joy Pilot — included with every No Worries package.
Want the bigger number?
Let’s talk it through.
A calculator gives you the numbers. A five-minute call with one of our qualified accountants gives you the context. No sales pitch — just a clear answer.
Prefer to talk? Call us on 020 7731 1117