Salary to Day Rate Calculator
Convert a permanent salary into an equivalent contractor day rate for 2026, itemising pension, holiday, sick pay and employer NI you'd give up.
Equivalent day rate needed
£206
Underlying net annual income£45,357
Billable days per year220
What day rate matches your current salary?
Moving from a permanent role to contracting means giving up benefits that don't show up on a payslip — employer pension contributions, paid holiday, sick pay — while also picking up costs a permanent role never has, such as employer National Insurance effectively coming out of your rate rather than being paid separately by an employer. Converting a salary into an equivalent day rate properly means itemising all of that, not just applying a flat multiplier.
What's itemised in the conversion
- The employer pension contribution you'd lose by leaving permanent employment, added back into the target rate
- The value of paid holiday and sick pay entitlement, which contracting doesn't provide
- Employer National Insurance at 15% above the £5,000 secondary threshold, which is effectively funded from your day rate under an inside-IR35 or umbrella arrangement
- Three separate target rates — umbrella, inside IR35 via agency PAYE, and outside IR35 through a limited company — rather than a single generic uplift, since each route is taxed differently for 2026/27
