£700 a day after tax
At £700 a day for 220 days a year, a UK contractor takes home about £6,715 a month through an umbrella company or £7,195 a month through a limited company in 2026/27; a limited company leaves more.
Umbrella company
For work inside IR35, paid through PAYE
£80,576 a year
£6,715 a month, plus £3,522 into your pension
Like a permanent salary of £129,793
Your own limited company More take-home
For work outside IR35, salary plus dividends
£86,337 a year
£7,195 a month
Like a permanent salary of £140,662
On £154,000 of fees (£700 a day for 220 days), a limited company leaves £5,761 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 | £154,000 |
|---|---|
| Umbrella margin (£20 a week × 44 weeks) | −£880 |
| Employer National Insurance (15% above £5,000) | −£19,062 |
| Apprenticeship Levy (0.5%) | −£660 |
| Employer pension (3% of qualifying earnings) | −£1,321 |
| Your gross pay, including holiday pay | £132,077 |
| Income tax | −£44,647 |
| National Insurance | −£4,652 |
| Your pension contribution (5%, before tax) | −£2,202 |
| Take-home pay | £80,576 |
Limited company, step by step
| Fees invoiced (excluding VAT) | £154,000 |
|---|---|
| Director salary | −£12,570 |
| Employer National Insurance on the salary | −£1,136 |
| Company profit | £140,295 |
| Corporation Tax (23.8% effective) | −£33,428 |
| Paid out as dividends | £106,866 |
| Your salary | £12,570 |
| Income tax and NI on the salary | −£1,944 |
| Your dividends | £106,866 |
| Dividend allowance on £500 | £0 |
| Ordinary rate (10.75%) on £27,482 | −£2,954 |
| Upper rate (35.75%) on £78,884 | −£28,201 |
| Take-home pay | £86,337 |
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 (£22,350) itself. On the full £154,000 you would keep £93,406, 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 | £140,000 | £75,287 | £82,041 |
| 220 | £154,000 | £80,576 | £86,337 |
| 230 | £161,000 | £83,770 | £88,486 |
| 240 | £168,000 | £86,964 | £91,500 |
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 £700 a day after tax?
Working 220 days a year (£154,000 of fees) in 2026/27, you take home about £80,576 a year (£6,715 a month) through an umbrella company, plus £3,522 into your pension, or £86,337 (£7,195 a month) through your own limited company outside IR35.
What permanent salary is £700 a day worth?
For the same take-home pay as a permanent employee you would need about £129,793 a year compared with the umbrella route, or £140,662 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 £700 a day for 220 days, the umbrella route leaves £75,249 and a limited company £86,377 in Scotland.
Other day rates
How the calculation works and every assumption: UK contractor calculator.