Updated for 2026/27

Contractor take-home pay calculator 2026/27

The bottom line for limited company contractors: from contract day rate or annual profit, what do you actually keep after corporation tax, salary taxes, employer NI and dividend tax?

Updated for 2026/27. Uses UK corporation tax, dividend tax and PAYE assumptions. Estimates only — not tax advice.

Calculator checked against GOV.UK and HMRC rules on (how we check).

Calculate company tax Read the guides
Net take-homeAll tax layersDay rate inputAnnual summary
2026/27 tax year Company profit to personal take-home Salary plus dividends Retained cash shown

Limited company tax calculator

Company tax estimate

Adjust inputs below — results update instantly.

Tax year 2026/27
How do you want to enter company income?
£

Enter profit before director salary, pension contributions and corporation tax.

£

Annual profit used in calculations = monthly profit × 12.

£
£
Expenses exceed estimated turnover — check your inputs.
£
£
Expenses exceed estimated turnover — check your inputs.
£
£

Amount you plan to withdraw from available post-tax company profit.

Selected dividends exceed available post-tax company profit.
£
£
£47,749 personal take-home / year £3,979/mo
Personal take-home is based on salary and dividends withdrawn. Post-tax profit not withdrawn is retained company cash.
Monthly net
£3,979
Total tax
£18,450
Effective rate
24.6%
Personal take-home£47,749
Dividend tax£4,821
Employer NI£1,136
Corporation tax£12,493
Company pension£0
Retained company cash£8,801
Show detailed breakdown ▼
Director salary£12,570.00
Employer National Insurance£1,135.50
Corporation tax£12,493.04
Salary income tax£0.00
Employee National Insurance£0.00
Dividend tax£4,821.25
Retained company cash£8,801.46
Personal take-home£47,748.75
Effective tax rate24.60%
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HMRC 2026/27 · Methodology
Quick answer

At £550 a day for 220 days with £4,000 of expenses, extracting everything leaves about £73,238 a year, £6,103 a month. Taking only enough to stay a basic-rate taxpayer leaves £46,271 now and £41,971 in the company.

Updated for 2026/27. Written and reviewed by James Whitfield against current GOV.UK and HMRC guidance · Editorial standards · Methodology. Estimates for planning only — not tax, accounting or financial advice.

Figures reviewed for the 2026/27 tax year. Source: GOV.UK.

About this calculator

Contractor take-home pay calculator 2026/27: what it covers

This calculator turns a contractor's day rate into an estimated annual take-home figure through a limited company. It works in stages: your day rate multiplied by the days and weeks you expect to bill gives turnover; deduct business expenses to reach profit; the company pays corporation tax on that profit (19% up to £50,000, 25% above £250,000, with marginal relief in between at an effective 26.5%); and what remains is extracted as a low salary plus dividends.

Most contractors take a director's salary around £12,570 to use the full Personal Allowance, then draw the rest as dividends from post-corporation-tax profit. Dividends carry no National Insurance and use the £500 dividend allowance, with tax at 10.75%, 35.75% and 39.35% across the bands. That salary-plus-dividend mix is why an outside-IR35 limited company contractor typically keeps more than an employee on the same headline figure.

The key variable is whether you extract everything or retain some profit in the company. Money left in the business has still paid corporation tax but no dividend tax, so retaining a buffer and drawing it in a later, lower-income year can smooth your personal tax. This tool estimates only; it is not personal tax advice.

How it works

From invoices to what you can spend

  1. Invoices are paid into the company account. None of it is yours until it is paid out as salary, dividends or expenses repaid.
  2. Each month, pay the salary through payroll and move money for Corporation Tax and VAT into a separate company savings account.
  3. Pay dividends when the board declares them, from profits the company has made after providing for Corporation Tax.1
  4. Keep part of each dividend aside personally for the dividend tax due on 31 January.2
  5. Decide how much to take this year and how much to leave in the company: the less you take above the basic-rate band, the less dividend tax you pay now.
More worked examples

A month of contracting cash

£550 a day, 220 days a year, £4,000 of expenses, everything taken out.

Profit for the year £117,000
Salary paid each month £1,047.50
Put aside each month for Corporation Tax £1,968.59
Dividends each month £6,639.29
Put aside each month for dividend tax £1,583.65
Spendable each month £6,103.14

These are averages. A month with fewer working days brings in less, so most contractors pay a steady dividend and keep a buffer in the company.

Take it all, or stop at the basic-rate band

The same year with two extraction choices.

Everything out: take-home £73,237.66
Everything out: dividend tax £19,003.80
£37,700 of dividends: take-home £46,271.00
£37,700 of dividends: dividend tax £3,999.00
£37,700 of dividends: left in the company £41,971.46

The retained money is not tax-free: it pays dividend tax when you take it out. Contractors use it for gaps between contracts, a quieter year, or a pension contribution.

Retained profit into a pension

As above, taking £37,700 of dividends, but the company also pays £15,000 into the director's pension.

Take-home this year £46,271.00
Corporation Tax saved by the contribution £3,975.00
Left in the company £41,971.46 → £30,946.46

Spendable income does not change; the pension is paid from money you were leaving in the company anyway, and it saves Corporation Tax on the way.

Mistakes and edge cases

Take-home mistakes contractors make

Spending the company balance
Corporation Tax, VAT and the year's dividend tax are hidden in the bank balance. Separate them each month.
Drawing money with no dividend paperwork
Money taken without a declared dividend or salary goes on the director's loan account. An overdrawn loan left unpaid nine months after the year end costs the company a 35.75% s455 charge.
Assuming outside IR35
Take-home inside IR35 is much lower. Check the status determination before you plan on these figures.
Forgetting the gaps
A year with eight weeks between contracts has about 40 fewer billed days. Retained profit is what pays you through them.
Common questions

Contractor take-home pay calculator 2026/27 — FAQs

Does the limited company route still beat an umbrella if I'm inside IR35?
Usually not. When a contract is caught by IR35 (off-payroll working), the fee is treated much like employment income, taxed through PAYE with employee and employer National Insurance, so the dividend advantage largely disappears. For inside-IR35 work an umbrella arrangement often produces a similar or simpler outcome. The limited company take-home advantage mainly applies to genuinely outside-IR35 contracts.
What take-home percentage of my day rate should I expect?
It depends on rate, expenses and extraction, so treat any single figure with caution. Outside IR35, a limited company contractor extracting most profit commonly keeps a meaningfully higher share than an employee once the low salary and dividend mix is applied. Enter your own numbers rather than relying on a rule of thumb.
Should I extract all my profit each year?
Not necessarily. Retained profit has already paid corporation tax but no dividend tax. Leaving a buffer and drawing it in a year when your total income is lower can reduce the dividend tax you pay, since higher dividends above £50,270 attract 35.75%. Extracting everything every year can push you into higher dividend rates unnecessarily.
Is the salary counted in my take-home?
Yes. Take-home combines your net salary and your net dividends. A £12,570 salary is free of income tax and employee NI for you, and it reduces company profit before corporation tax, so it forms the tax-efficient base of the extraction before dividends are added on top.
Sources & references

Where these figures come from

The rates and rules on this page are drawn from the official UK government sources below, using the confirmed 2026/27 figures. Each link opens the relevant HMRC, GOV.UK or Companies House page in a new tab.

  1. Corporation Tax rates and reliefs www.gov.uk/corporation-tax-rates
  2. Tax on dividends www.gov.uk/tax-on-dividends
  3. Understanding off-payroll working (IR35) www.gov.uk/guidance/understanding-off-payroll-working-ir35
  4. Rates and thresholds for employers 2026 to 2027 www.gov.uk/guidance/rates-and-thresholds-for-employers-2026-to-2027
  5. Director's loans www.gov.uk/directors-loans
Verified against published UK government guidance.
Power tools

More calculators

Limited company tax calculator
Company profit to take-home: Corporation Tax, employer NI, salary and dividend tax in one view.
Corporation tax calculator 2026/27
The company's bill at 19%, 25% or with marginal relief, and when it is due.
Salary vs dividend calculator 2026/27
Compare taking money as salary or dividends and see which salary leaves you the most.
Director salary calculator 2026/27
£0, £5,000, £9,100 or £12,570: what each salary costs the company and saves you.
Dividend tax calculator 2026/27
Dividend tax on top of your salary, band by band, after the £500 allowance.
Available dividends calculator
How much the company can lawfully pay out after salary, pension and Corporation Tax.
Retained profit calculator 2026/27
What stays in the company when you take less than all the profit, and the tax that defers.
Director take-home pay calculator 2026/27
What reaches your bank account each year and month, and what to set aside for January.
Practical guides

Limited company guides

Limited Company Tax in Scotland 2026/27: Salary, Dividends and Corporation Tax
In Scotland, corporation tax is the same 19%–25% as the rest of the UK and dividends are taxed at the UK rates of 10.75%, 35.75% and 39.35%. Only a director's salary uses Scottish income tax bands. 2026/27 examples.
Corporation Tax Rates 2026/27: 19%, 25% and Marginal Relief
Corporation tax rates 2026/27: 19% on profits up to £50,000, 25% over £250,000, marginal relief between (26.5% marginal rate). £100,000 profit pays £22,750. Table and examples.
Optimal Salary and Dividend Split for Directors 2026/27
How to calculate the tax-efficient salary and dividend combination for a limited company director in 2026/27, covering corporation tax, income tax, NI and the dividend allowance.
Salary vs Dividends 2026/27: The Optimal Split for Company Directors
The tax-efficient salary vs dividends split for UK company directors in 2026/27: a £12,570 salary, then dividends taxed at 10.75%. Corporation tax, the £500 dividend allowance, employer NI and a full worked example extracting £50,000.
Director's Loan Account 2026/27: s455 at 35.75%, 30-Day Rule
Overdrawn director's loan account in 2026/27: s455 at 35.75% if not repaid 9 months and 1 day after year end, refundable later; £10,000 benefit-in-kind limit; 30-day rule.
Limited Company Allowable Expenses: A Practical Guide 2026/27
What a limited company can legitimately deduct as business expenses, reducing corporation tax. Covers running costs, director expenses, travel, equipment, and home office claims.
Getting set up

Business bank accounts

A limited company must keep its finances separate from personal accounts. These accounts are free to open.

Starling Business
Permanently free, no monthly fee. A fully licensed UK bank - eligible deposits are FSCS protected up to £120,000 per eligible depositor, per authorised bank (brands sharing one banking licence share one limit). A limited company's account is protected separately from your personal accounts. Accepts limited companies and sole traders. 0.7% on Post Office cash deposits.
Open an account →
Tide
Free to open. Built-in invoicing and expense tracking. 20p per outgoing transfer on the free tier (Tide Plus is £9.99/month). Funds are safeguarded as e-money, not FSCS protected. Usually has a new-account offer.
Open an account →
Mettle by NatWest
Free. Single-director limited companies only (max two owners, one account user). Includes FreeAgent bookkeeping at no extra cost. Funds are safeguarded as e-money, not FSCS protected. No cash deposits.
Open an account →
Registering at Companies House

Companies House now charges £100 to register a limited company online (up from £50 in February 2026). Same-day registration is £156, through software filing only (for example via a formation agent). You can register directly at gov.uk or through a formation agent.

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