£250 a day after tax
At £250 a day for 220 days a year, a UK contractor takes home about £2,947 a month through an umbrella company or £3,540 a month through a limited company in 2026/27; a limited company leaves more.
Umbrella company
For work inside IR35, paid through PAYE
£35,363 a year
£2,947 a month, plus £3,218 into your pension
Like a permanent salary of £44,227
Your own limited company More take-home
For work outside IR35, salary plus dividends
£42,477 a year
£3,540 a month
Like a permanent salary of £55,033
On £55,000 of fees (£250 a day for 220 days), a limited company leaves £7,113 a year more. "Like a permanent salary" is the employee salary with the same take-home pay.
Umbrella company, step by step
| Fees from the agency | £55,000 |
|---|---|
| Umbrella margin (£20 a week × 44 weeks) | −£880 |
| Employer National Insurance (15% above £5,000) | −£6,219 |
| Apprenticeship Levy (0.5%) | −£232 |
| Employer pension (3% of qualifying earnings) | −£1,207 |
| Your gross pay, including holiday pay | £46,462 |
| Income tax | −£6,376 |
| National Insurance | −£2,711 |
| Your pension contribution (5%, before tax) | −£2,011 |
| Take-home pay | £35,363 |
Limited company, step by step
| Fees invoiced (excluding VAT) | £55,000 |
|---|---|
| Director salary | −£12,570 |
| Employer National Insurance on the salary | −£1,136 |
| Company profit | £41,295 |
| Corporation Tax (19.0% effective) | −£7,846 |
| Paid out as dividends | £33,449 |
| Your salary | £12,570 |
| Your dividends | £33,449 |
| Dividend allowance on £500 | £0 |
| Ordinary rate (10.75%) on £32,949 | −£3,542 |
| Take-home pay | £42,477 |
Inside IR35 through your own company, the agency or client deducts income tax and National Insurance as if you were an employee and pays employer National Insurance (£7,500) itself. On the full £55,000 you would keep £42,457, but inside-IR35 rates are usually lower than outside-IR35 rates, so compare the rate you are actually offered.
Fees exclude VAT. See the assumptions behind both routes.
By days worked
| Days a year | Fees | Umbrella, a year | Limited company, a year |
|---|---|---|---|
| 200 | £50,000 | £32,540 | £38,862 |
| 220 | £55,000 | £35,363 | £42,477 |
| 230 | £57,500 | £36,775 | £44,284 |
| 240 | £60,000 | £38,228 | £46,091 |
England, Wales or Northern Ireland, 2026/27, £12,570 director salary, no business costs, umbrella margin £20 a week with the minimum workplace pension.
Frequently asked questions
How much is £250 a day after tax?
Working 220 days a year (£55,000 of fees) in 2026/27, you take home about £35,363 a year (£2,947 a month) through an umbrella company, plus £3,218 into your pension, or £42,477 (£3,540 a month) through your own limited company outside IR35.
What permanent salary is £250 a day worth?
For the same take-home pay as a permanent employee you would need about £44,227 a year compared with the umbrella route, or £55,033 compared with a limited company, before pension and benefits such as paid holiday and sick pay.
Is it different in Scotland?
Salary is taxed at Scottish rates, dividends at UK rates. At £250 a day for 220 days, the umbrella route leaves £35,088 and a limited company £42,477 in Scotland.
Other day rates
How the calculation works and every assumption: UK contractor calculator.