Updated for 2026/27

Day rate tax calculator, limited company

Enter your contract day rate, billable days and annual expenses to estimate company profit, then see corporation tax, salary, dividends and personal take-home in one view.

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
Day rate to profitExpenses deductedCorp tax estimatePersonal take-home
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Personal take-home is based on salary and dividends withdrawn. Post-tax profit not withdrawn is retained company cash.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

Multiply the day rate by the days you will really bill, not 52 weeks of five days. £450 a day for 220 days is £99,000 of turnover and, after £3,000 of expenses and all the taxes, about £63,321 take-home through a limited company outside IR35.

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

Day rate tax calculator, limited company: what it covers

This calculator converts a day rate into an annual take-home estimate, and the single biggest assumption is how many days you actually bill. The chain is simple: day rate multiplied by billable days per week, multiplied by the number of weeks you work, gives annual turnover. Subtract expenses to reach profit, then apply the tax layers: corporation tax (19% to £50,000, 25% above £250,000, marginal relief between), a £12,570 director's salary, and dividends taxed at 10.75%, 35.75% and 39.35% after the £500 allowance.

The billable-weeks figure is where headline day rates become misleading. A year has 52 weeks, but after holiday, bank holidays, illness, admin and gaps between contracts, many contractors bill closer to 44–46 weeks. Assuming a full 52 overstates turnover and every tax figure that follows. It is worth modelling a conservative week count as well as an optimistic one.

Comparing two day rates fairly means holding weeks and expenses constant, then reading net take-home rather than gross turnover, because dividends above £50,270 cross into 35.75%. This is an estimate, not personal tax advice.

How it works

Turning a day rate into a year

  1. Count the days you can bill: 260 weekdays, less bank holidays (usually 8 in England and Wales), your own holiday, sick days, training and the gaps between contracts.
  2. Multiply by the day rate to get turnover, before VAT.
  3. Subtract the company's costs: insurance, accountant, equipment, software and allowable travel.
  4. Run the profit through the company taxes: a £12,570 salary, Corporation Tax, then dividends with dividend tax.12
  5. Divide take-home by billed days to compare contracts on a like-for-like basis.
More worked examples

£450 a day at three levels of utilisation

The same rate and £3,000 of expenses, with fewer billed days each time.

220 days: turnover £99,000 £63,321 take-home, £288 per day billed
200 days: turnover £90,000 £59,071 take-home, £295 per day billed
180 days: turnover £81,000 £54,820 take-home, £305 per day billed

Billing 40 more days (180 to 220) adds £18,000 of turnover but only £8,500 of take-home, because those days are taxed at your highest rates. That is useful when weighing a rate cut against a longer contract.

Different rates, same year

A higher rate on a shorter contract can come to exactly the same year as a lower rate on a longer one.

£500 a day for 180 days £90,000 turnover, £59,071 take-home
£400 a day for 225 days £90,000 turnover, £59,071 take-home

Tax depends on the year's profit, not the rate. Compare offers on annual turnover after the gaps you expect.

What day rate matches a £60,000 permanent job?

An employee on £60,000 takes home £45,357 after income tax and NI. The day rate that gives the same take-home through a company, over 220 billed days with £3,000 of expenses:

Employee take-home on £60,000 £45,357
Equivalent day rate (220 days) about £282

That is the break-even on tax alone. An employee also gets paid holiday, sick pay and usually an employer pension contribution, none of which a contractor has, so most contractors look for a rate well above this figure.

Mistakes and edge cases

Day-rate assumptions that mislead

Assuming 52 weeks
Five days a week all year is 260 days. Take off 8 bank holidays and 25 days of your own holiday and 227 are left, before any illness, training or gaps.
Leaving out the gaps
Two months between contracts is more than 40 lost days. Model a year with a gap as well as a year without.
Mixing VAT into the rate
A rate quoted 'plus VAT' is your turnover. A rate quoted including VAT is not.
Converting hourly rates at 8 hours
Many contracts define a day as 7 or 7.5 hours. £60 an hour at 7.5 hours is £450 a day, not £480.
Common questions

Day rate tax calculator, limited company — FAQs

How many billable weeks should I assume in a year?
Be realistic rather than optimistic. From 52 weeks, subtract holiday, bank holidays, likely sick days, and time between contracts. Many contractors settle on roughly 44 to 46 billable weeks. Because turnover and every tax layer scale directly with this number, an over-generous assumption inflates the whole result, so it is sensible to test a cautious figure too.
How do I compare a higher day rate on a shorter contract with a lower rate on a longer one?
Convert both to annual take-home using the same expenses and a realistic total number of billable weeks across the year, including any gap between contracts. A high rate for three months can lose to a modest rate for twelve once idle weeks are counted. Compare net take-home, not the headline day rate.
Does a higher day rate always mean proportionally more take-home?
No. As profit grows, more dividends fall above £50,270 and are taxed at 35.75% instead of 10.75%, and higher profits move the company toward the 25% corporation tax territory via marginal relief. Take-home still rises with the day rate, but each extra pound is taxed more heavily, so the increase is less than proportional.
Should VAT change how I read my day rate?
VAT sits on top of your day rate and is not your income; you collect it and pass it to HMRC. But note that a full-time day rate pushes annual turnover past the £90,000 VAT registration threshold quickly, so factor registration into your planning even though VAT itself does not increase your take-home.
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. UK bank holidays www.gov.uk/bank-holidays
Verified against published UK government guidance.
Power tools

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What stays in the company when you take less than all the profit, and the tax that defers.
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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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