Freelance day-rate to salary calculator
Enter your day rate and working pattern to compare sole trader, limited company, and PAYE/umbrella take-home — plus what PAYE salary would match your net pay.
Software, insurance, accountant, equipment, etc.
Only relevant above £60,000 — see the High Income Child Benefit Charge below.
Employer contribution from company profit for the limited-company figures, or salary sacrifice for the PAYE/umbrella comparison — more tax-efficient than taking it as cash, but it stays invested rather than landing as take-home now.
Sole trader
Net take-home
£50,983
Limited company
Net take-home
£50,412
PAYE / umbrella
Net take-home
£51,389
Sole trader breakdown
Gross revenue
£70,400
Taxable profit
£68,400
Income tax (est.)
£14,792
Class 4 NI (est.)
£2,625
Where your revenue goes:
You're currently in the Higher rate band, taxed at 40% on your next pound.
Limited company breakdown
Director salary
£12,570
Corporation tax (est.)
£10,744
Dividend tax (est.)
£6,109
Net dividends
£37,842
Where your revenue goes:
Where your dividends sit in the dividend tax bands (the director's salary itself uses up the personal allowance, so these are separate from the Income Tax bands above):
You're currently in the Higher rate band, taxed at 36% on your next pound.
PAYE / umbrella breakdown (same gross income)
What a permanent employee or umbrella-company worker would take home for the same £70,400 gross — a different question from "equivalent salary" below, which instead asks what salary matches your actual take-home.
Income tax (est.)
£15,592
NI (est.)
£3,419
Where your revenue goes:
You're currently in the Higher rate band, taxed at 40% on your next pound.
An employer would separately pay £9,810 in Employer's National Insurance — not deducted from this take-home.
Equivalent PAYE salary for the same net take-home
£69,700
An employer would pay roughly £80,726 in total (salary + employer NI + 3% pension) to give you that take-home — employment costs more than the headline salary suggests.
Based on 44 working weeks/year.
Estimates use simplified 2025/26 UK rates, unchanged for 2026/27 (income tax and NI thresholds are frozen through 2030/31), with England, Wales & NI income tax bands. Sole trader: income tax + Class 4 NI. Limited company (outside IR35): a £12,570 director salary, corporation tax with marginal relief, and dividend tax on full in-year extraction at the 2026/27 rates (10.75%/35.75%/39.35%, raised 2pp at the basic and higher bands from 6 April 2026), assuming no Employment Allowance. PAYE/umbrella: the same gross income taxed as an ordinary salary. Pension contributions are limited to an employer contribution from company profit (or salary sacrifice for the PAYE comparison) — personal contributions and partial retained-profit strategies aren't modelled. If you have children, the High Income Child Benefit Charge (£60,000–£80,000 taper, 2026/27 rates) is applied separately to each structure's own income. Use as a general guide, not tax or IR35 advice.
Sole trader vs limited company: how the numbers differ
As a sole trader, your day-rate income (minus expenses) is taxed directly as personal income: income tax on the usual bands, plus Class 4 National Insurance. There's no separate company layer — what's left after tax is yours.
Through a limited company, you typically pay yourself a modest director's salary (taxed as normal employment income) and extract the rest as dividends, which are taxed separately after the company pays corporation tax on its profit first. This two-step structure is often more tax-efficient than sole trader income at higher revenue levels, which is why it's worth comparing rather than assuming.
IR35 determines which of these applies to contract work. If a contract is genuinely outside IR35, you're treated as running an independent business and the limited company route above applies in full. If it's inside IR35, HMRC treats the income like employment for tax purposes — the dividend route isn't available, and tax/NI are deducted much like a payslip, which this calculator approximates as a deemed payment.
The PAYE / umbrella card is a third, simpler reference point: it skips the business-structure question entirely and just asks what a permanent employee or umbrella-company worker would take home from the same gross billing, taxed as an ordinary salary with no expenses or company layer at all.