£400 a day after tax
At £400 a day for 220 days a year, a UK contractor takes home about £4,392 a month through an umbrella company or £4,962 a month through a limited company in 2026/27; a limited company leaves more.
Umbrella company
For work inside IR35, paid through PAYE
£52,698 a year
£4,392 a month, plus £3,522 into your pension
Like a permanent salary of £72,657
Your own limited company More take-home
For work outside IR35, salary plus dividends
£59,543 a year
£4,962 a month
Like a permanent salary of £84,458
On £88,000 of fees (£400 a day for 220 days), a limited company leaves £6,844 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 | £88,000 |
|---|---|
| Umbrella margin (£20 a week × 44 weeks) | −£880 |
| Employer National Insurance (15% above £5,000) | −£10,490 |
| Apprenticeship Levy (0.5%) | −£375 |
| Employer pension (3% of qualifying earnings) | −£1,321 |
| Your gross pay, including holiday pay | £74,934 |
| Income tax | −£16,525 |
| National Insurance | −£3,509 |
| Your pension contribution (5%, before tax) | −£2,202 |
| Take-home pay | £52,698 |
Limited company, step by step
| Fees invoiced (excluding VAT) | £88,000 |
|---|---|
| Director salary | −£12,570 |
| Employer National Insurance on the salary | −£1,136 |
| Company profit | £74,295 |
| Corporation Tax (21.5% effective) | −£15,938 |
| Paid out as dividends | £58,356 |
| Your salary | £12,570 |
| Your dividends | £58,356 |
| Dividend allowance on £500 | £0 |
| Ordinary rate (10.75%) on £37,200 | −£3,999 |
| Upper rate (35.75%) on £20,656 | −£7,385 |
| Take-home pay | £59,543 |
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 (£12,450) itself. On the full £88,000 you would keep £61,597, 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 | £80,000 | £48,721 | £55,765 |
| 220 | £88,000 | £52,698 | £59,543 |
| 230 | £92,000 | £54,687 | £61,432 |
| 240 | £96,000 | £56,676 | £63,321 |
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 £400 a day after tax?
Working 220 days a year (£88,000 of fees) in 2026/27, you take home about £52,698 a year (£4,392 a month) through an umbrella company, plus £3,522 into your pension, or £59,543 (£4,962 a month) through your own limited company outside IR35.
What permanent salary is £400 a day worth?
For the same take-home pay as a permanent employee you would need about £72,657 a year compared with the umbrella route, or £84,458 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 £400 a day for 220 days, the umbrella route leaves £50,694 and a limited company £59,543 in Scotland.
Other day rates
How the calculation works and every assumption: UK contractor calculator.