What is DayRateConverter?
DayRateConverter is a free, independent online calculator designed to help UK contractors and freelancers convert their contract day rate into a meaningful equivalent salary figure — accounting for the things a standard salary-to-day-rate rule of thumb completely ignores.
Most online converters simply multiply your day rate by the number of working days in a year. That's not enough. A contractor's true take-home pay depends on whether they're working inside or outside IR35, how much salary they take from their limited company, their dividend tax position, pension contributions, allowable expenses, accountant fees, and National Insurance on both sides. DayRateConverter models all of these.
What makes this calculator different?
Most day rate calculators give you a gross equivalent salary and stop there. DayRateConverter shows you:
Inside vs outside IR35 side by side — so you can see the real financial cost of an inside-IR35 engagement before you accept it.
True net take-home — after corporation tax, income tax on salary, employee NI, dividend tax (above the £500 allowance), and employer NI where applicable.
Pension efficiency — employer pension contributions from a limited company are fully deductible against corporation tax, making them one of the most tax-efficient ways to extract value from a contract. The calculator models this directly.
Effective tax rate — your total tax burden as a percentage of revenue, so you can compare contractor taxation to equivalent permanent roles fairly.
Who built this?
DayRateConverter is an independent public resource. We are not a contractor accountant, umbrella company, tax adviser, or recruitment agency. We do not earn referral fees or commissions from any financial or payroll services. The site is funded solely by advertising displayed on the page.
Is this tax advice?
No. DayRateConverter is an estimation and information tool only. Nothing on this site constitutes financial, tax, or legal advice. UK contractor taxation — particularly IR35 — is complex and your personal circumstances will significantly affect your actual position. We strongly recommend consulting a qualified contractor accountant before making decisions based on these figures. Many offer a free initial consultation.
How accurate is the calculator?
The calculator uses 2025/26 UK tax rates including the current corporation tax small profits rate (19%) and marginal relief thresholds, the £12,570 personal allowance, the £500 dividend allowance, employee NI rates (8% up to the upper earnings limit, 2% above), and the 13.8% employer NI rate above the secondary threshold. All figures should be treated as estimates — your actual position depends on your specific expenses, pension arrangements, and other income sources.
Ready to calculate? Head back to the day rate converter to see your true take-home pay in under 2 minutes.