£500 a day after tax
At £500 a day for 220 days a year, a UK contractor takes home about £5,312 a month through an umbrella company or £5,828 a month through a limited company in 2026/27; a limited company leaves more.
Umbrella company
For work inside IR35, paid through PAYE
£63,746 a year
£5,312 a month, plus £3,522 into your pension
Like a permanent salary of £91,705
Your own limited company More take-home
For work outside IR35, salary plus dividends
£69,932 a year
£5,828 a month
Like a permanent salary of £103,617
On £110,000 of fees (£500 a day for 220 days), a limited company leaves £6,186 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 | £110,000 |
|---|---|
| Umbrella margin (£20 a week × 44 weeks) | −£880 |
| Employer National Insurance (15% above £5,000) | −£13,347 |
| Apprenticeship Levy (0.5%) | −£470 |
| Employer pension (3% of qualifying earnings) | −£1,321 |
| Your gross pay, including holiday pay | £93,982 |
| Income tax | −£24,144 |
| National Insurance | −£3,890 |
| Your pension contribution (5%, before tax) | −£2,202 |
| Take-home pay | £63,746 |
Limited company, step by step
| Fees invoiced (excluding VAT) | £110,000 |
|---|---|
| Director salary | −£12,570 |
| Employer National Insurance on the salary | −£1,136 |
| Company profit | £96,295 |
| Corporation Tax (22.6% effective) | −£21,768 |
| Paid out as dividends | £74,526 |
| Your salary | £12,570 |
| Your dividends | £74,526 |
| Dividend allowance on £500 | £0 |
| Ordinary rate (10.75%) on £37,200 | −£3,999 |
| Upper rate (35.75%) on £36,826 | −£13,165 |
| Take-home pay | £69,932 |
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 (£15,750) itself. On the full £110,000 you would keep £72,357, 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 | £100,000 | £58,765 | £65,210 |
| 220 | £110,000 | £63,746 | £69,932 |
| 230 | £115,000 | £66,237 | £72,293 |
| 240 | £120,000 | £68,654 | £74,654 |
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 £500 a day after tax?
Working 220 days a year (£110,000 of fees) in 2026/27, you take home about £63,746 a year (£5,312 a month) through an umbrella company, plus £3,522 into your pension, or £69,932 (£5,828 a month) through your own limited company outside IR35.
What permanent salary is £500 a day worth?
For the same take-home pay as a permanent employee you would need about £91,705 a year compared with the umbrella route, or £103,617 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 £500 a day for 220 days, the umbrella route leaves £60,857 and a limited company £69,932 in Scotland.
Other day rates
How the calculation works and every assumption: UK contractor calculator.