SELF-EMPLOYED VS PAYE  ·  CONTRACTOR CALCULATOR UK  ·  LIMITED COMPANY VS SALARY  ·  IR35 2026  · 
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Self-Employed vs PAYE

Compare your take-home as a contractor vs employee.

£

The salary you would earn as a permanent employee.

£
days

220 days is typical after holidays and gaps between contracts.

£

Laptop, phone, software, accountant fees etc.

⚡ DID YOU KNOW?

A £350/day contractor working 220 days earns £77,000 gross — but their take-home depends heavily on how they structure their company.

Enter your details to compare →

£
£
220 days
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Self-Employed vs PAYE FAQs

Is contracting through a limited company more tax efficient?

Generally yes — a limited company allows you to pay yourself a salary up to the personal allowance and take the rest as dividends, which are taxed at a lower rate than income tax. The saving versus PAYE typically ranges from £3,000 to £15,000 per year depending on income.

What is IR35 and how does it affect contractors?

IR35 is legislation designed to prevent disguised employment. If HMRC decides your contract is effectively employment, you pay tax as if you were a PAYE employee. Your end client now determines IR35 status in the public sector and large private companies. This calculator shows the tax position outside IR35.

What is a good day rate equivalent to a £50k salary?

A rough guide is to divide your salary by 220 (working days) and multiply by 1.5 to 2x to account for lack of benefits, holiday pay, sick pay, and gaps between contracts. For £50,000 that works out to around £340-£455/day.