Contractor Calculator
£1250 Per Day: Take-Home Pay Breakdown (2026/27)
Contracting at £1250 per day generates £275,000 per year (220 days). Here's how much you take home in 2026/27 under each working arrangement.
| Structure | Gross | Income Tax | Take-Home |
|---|---|---|---|
| Limited Company Outside IR35 Most efficient | £275,000 | £63,583 | £144,958 |
| PAYE Employee / Umbrella | £275,000 | £110,582 | £156,908 |
| Limited Company Inside IR35 | £275,000 | £87,097 | £129,249 |
| Sole Trader | £275,000 | £110,582 | £156,908 |
Based on 220 working days (£275,000 annual gross). Ltd company uses £12,570 salary. 2026/27 HMRC rates. Rest-of-UK (non-Scottish) taxpayer. No pension contributions.
Want to adjust the numbers?
Change working days, add pension contributions, or toggle Scotland rates.
Limited Company (Outside IR35) — Detailed Breakdown
Annual fees (gross)
£275,000
£1250/day × 220 days
Salary drawn
£12,570
At personal allowance
Dividends
£195,971
After corporation tax
Corporation tax
£65,324
On £261,295 profit
Dividend tax
£63,583
Personal tax on dividends
Take-home pay
£144,958
Per year after all taxes
Frequently Asked Questions
How much do I take home on £1250 per day as a limited company?
At £1250 per day (£275,000 annual gross over 220 working days), a limited company director outside IR35 takes home approximately £144,958 in 2026/27. This assumes a £12,570 salary with remaining profits extracted as dividends, giving an effective tax rate of around 46.9%.
What is the difference between PAYE and a limited company at £1250 per day?
On £1250/day, a limited company (outside IR35) takes home £144,958 versus £156,908 under PAYE — a difference of £-11,950 per year. The Ltd structure is more tax-efficient because profits above your salary are paid as dividends, which attract lower tax rates than employment income.
Does IR35 affect my take-home pay at £1250 per day?
Yes, significantly. Inside IR35 at £1250/day, you take home approximately £129,249 — around £15,709 less than outside IR35. Inside IR35, your income is treated as deemed employment: employer NI is deducted first, then you pay income tax and employee NI on the remainder, with only a 5% flat expense allowance.
How many working days are used in this calculation?
This breakdown uses 220 working days per year, which is a common assumption for UK contractors (approximately 260 weekdays minus bank holidays and leave). Your actual earnings will vary based on how many days you work. You can adjust the figure using the interactive calculator.
See also
These calculations are estimates based on current published tax rates. They do not constitute financial, tax, or legal advice. Always consult a qualified accountant for your specific situation.
Tax rates sourced from HMRC published rates for the 2026/27 tax year. Last verified: March 2026.
Rates based on HMRC published tax rates for 2026/27.