Contractor take-home pay calculator
Enter your day rate, the days you bill and what you pay yourself to see what reaches your bank account after corporation tax, employer NI and dividend tax.
Rates for the 2026/27 tax year. Checked 6 November 2026.
| Company revenue | £110,000.00 |
|---|---|
| Salary paid to you | − £12,570.00 |
| Employer National Insurance | − £1,135.50 |
| Expenses | − £2,000.00 |
| Profit before tax | £94,294.50 |
| Corporation tax | − £21,238.05 |
| Paid to you as dividends | £73,056.45 |
| Plus salary | £12,570.00 |
| Income tax on salary | − £0.00 |
| Employee National Insurance | − £0.00 |
| Dividend tax | − £16,638.93 |
| Take-home | £68,987.52 |
That is 62.7% of what the company billed. Pension goes to your pot, not your pocket, so it is left out.
Worked example: £500 a day, 220 days
At £500 a day for 220 days you keep £68,987.52 of the £110,000 your company bills, about 63%. A £12,570 salary costs £1,135.50 in employer NI, and with £2,000 of expenses profit is £94,294.50. Corporation tax at 25% less marginal relief is £21,238.05, about 22.5%, and the remaining £73,056.45 is paid to you as dividends.
The salary sits inside your personal allowance, so it pays no income tax or employee NI. Of the dividends, £500 is tax free and £37,200 is taxed at 10.75%. The rest is taxed at 35.75%, which brings dividend tax to £16,638.93.
What moves the result
- Day rate: once salary plus dividends pass about £50,270, each extra pound of dividend is taxed at 35.75% instead of 10.75%.
- The £100k taper: between £100,000 and £125,140 of salary plus dividends the personal allowance is withdrawn, so take-home grows slowly.
- Pension: an employer contribution is paid before corporation tax and reduces the dividends you draw, which can bring you back under £100,000.
- Expenses and pension also cut profit, which between £50,000 and £250,000 is taxed on a sliding scale from 19% to 25%.
- Share split: dividends paid to a spouse or civil partner use their allowance and bands. The family shareholder calculator shows the saving.
When this calculator is wrong for you
- You are inside IR35 or work through an umbrella.
- You live in Scotland.
- You have other income, such as rent or a second job, that uses your bands.
- Your company has other shareholders, a different year end or associated companies.
Questions people ask
What salary should a limited company director take in 2026/27?
£12,570 for most sole directors. It matches the personal allowance, so no income tax or employee National Insurance is due on it, and it keeps your NI record going. Employer NI is due above £5,000 and is included here.
Does VAT change my take-home?
No. A VAT-registered company adds VAT to invoices and passes it to HMRC, so it does not change what you keep. The flat rate scheme can leave a small surplus, which the VAT calculator works out.
How does the £100k tax trap affect contractors?
Once salary plus dividends pass £100,000, your personal allowance shrinks by £1 for every £2 and is gone at £125,140, so take-home rises slowly in that band. An employer pension contribution reduces the dividends you draw and can bring you back under £100,000.
Do I have to take all the profit as dividends?
No, and many contractors leave some in the company. Retained profit defers dividend tax until you draw it, but corporation tax is still due. The figures here assume you draw everything, so they show the full personal tax bill.
Does this work for Scottish taxpayers?
Not yet. Scottish income tax bands differ for salary, while dividend tax and corporation tax are UK-wide.
What if my contract is inside IR35?
Then these figures do not apply. Inside IR35 you are taxed like an employee through an umbrella or the client’s payroll, so use the inside vs outside IR35 comparison or the umbrella calculator.
How this is worked out
Revenue is day rate times days billed. Profit is revenue less salary, employer NI at 15% above £5,000, expenses and pension. Corporation tax is 19% up to £50,000, 25% from £250,000, and in between 25% less marginal relief of 3/200 of the gap to £250,000. All post-tax profit is paid as dividends. Salary is taxed with the 2026/27 personal allowance of £12,570 and bands of 20%, 40% and 45%; employee NI is 8% to £50,270 then 2%. Dividends sit on top of salary, with a £500 allowance and rates of 10.75%, 35.75% and 39.35%. Amounts are rounded to the penny at each step.
Full formulas, rounding rules and test cases are on the methodology page. Every rate update is listed in the changelog.