£650 a day after tax
At £650 a day for 220 days a year, a UK contractor takes home about £6,354 a month through an umbrella company or £6,914 a month through a limited company in 2026/27; a limited company leaves more.
Umbrella company
For work inside IR35, paid through PAYE
£76,247 a year
£6,354 a month, plus £3,522 into your pension
Like a permanent salary of £120,237
Your own limited company More take-home
For work outside IR35, salary plus dividends
£82,962 a year
£6,914 a month
Like a permanent salary of £134,294
On £143,000 of fees (£650 a day for 220 days), a limited company leaves £6,715 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 | £143,000 |
|---|---|
| Umbrella margin (£20 a week × 44 weeks) | −£880 |
| Employer National Insurance (15% above £5,000) | −£17,633 |
| Apprenticeship Levy (0.5%) | −£613 |
| Employer pension (3% of qualifying earnings) | −£1,321 |
| Your gross pay, including holiday pay | £122,553 |
| Income tax | −£39,643 |
| National Insurance | −£4,462 |
| Your pension contribution (5%, before tax) | −£2,202 |
| Take-home pay | £76,247 |
Limited company, step by step
| Fees invoiced (excluding VAT) | £143,000 |
|---|---|
| Director salary | −£12,570 |
| Employer National Insurance on the salary | −£1,136 |
| Company profit | £129,295 |
| Corporation Tax (23.6% effective) | −£30,513 |
| Paid out as dividends | £98,781 |
| Your salary | £12,570 |
| Income tax and NI on the salary | −£1,135 |
| Your dividends | £98,781 |
| Dividend allowance on £500 | £0 |
| Ordinary rate (10.75%) on £31,525 | −£3,389 |
| Upper rate (35.75%) on £66,756 | −£23,865 |
| Take-home pay | £82,962 |
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 (£20,700) itself. On the full £143,000 you would keep £87,576, 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 | £130,000 | £71,997 | £78,973 |
| 220 | £143,000 | £76,247 | £82,962 |
| 230 | £149,500 | £78,493 | £84,957 |
| 240 | £156,000 | £81,458 | £86,951 |
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 £650 a day after tax?
Working 220 days a year (£143,000 of fees) in 2026/27, you take home about £76,247 a year (£6,354 a month) through an umbrella company, plus £3,522 into your pension, or £82,962 (£6,914 a month) through your own limited company outside IR35.
What permanent salary is £650 a day worth?
For the same take-home pay as a permanent employee you would need about £120,237 a year compared with the umbrella route, or £134,294 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 £650 a day for 220 days, the umbrella route leaves £71,421 and a limited company £83,002 in Scotland.
Other day rates
How the calculation works and every assumption: UK contractor calculator.