£550 Per Day: Take-Home Pay Breakdown (2026/27)

Q: How much do I take home on £550 per day as a limited company?

At £550 per day (£121,000 pa, 220 days), a limited company director outside IR35 takes home approximately £76,973 in 2026/27 — an effective tax rate of 36.4%. This assumes a £12,570 salary with remaining profits paid as dividends.

Q: What is the difference between PAYE and a limited company at £550 per day?

On £550 per day, PAYE takes home £76,219 versus £75,127 for a limited company (outside IR35) — a difference of £1,093 per year. At this income level, the combined burden of Corporation Tax and dividend tax exceeds PAYE income tax and NI, making PAYE more efficient. The April 2026 dividend tax increase contributed to this crossover.

Contracting at £550 per day generates £121,000 per year (220 days). Here's how much you take home in 2026/27 under each working arrangement.

Structure	Gross	Income Tax	NI	Corp Tax	Take-Home	Eff. Rate
Limited Company Outside IR35	£121,000	£20,055	£0	£24,683	£75,127	37.0%
PAYE Employee / Umbrella	£121,000	£40,350	£4,431	—	£76,219	37.0%
Limited Company Inside IR35	£121,000	£27,797	£4,023	—	£68,789	38.1%
Sole Trader Most efficient	£121,000	£40,350	£3,677	—	£76,973	36.4%

Based on 220 working days (£121,000 annual gross). Ltd company uses £12,570 salary. 2026/27 HMRC rates. Rest-of-UK (non-Scottish) taxpayer. No pension contributions.

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Who earns £550 per day?

Is £550 per day a good rate?

£550 a day reflects senior specialists and emerging technical leads. Data engineers, lead developers, and experienced scrum masters frequently command this rate. It is the upper end of the mainstream senior-developer band, where deep domain or platform expertise begins to push rates higher.

Worked example

A data engineer billing £550 a day across a full year is comfortably into higher-rate tax territory. That makes pension contributions and the salary/dividend split more impactful — the breakdown below uses a standard £12,570 salary, but the interactive calculator lets you model pension contributions on top.

Over 220 working days, £550 per day comes to £121,000 in gross fees. As a limited company outside IR35 that leaves roughly £75,127 in your pocket after Corporation Tax, dividend tax and National Insurance — an effective tax rate of around 37.0%. The same fees taken through an umbrella under PAYE would return about £76,219, while inside IR35 the figure falls to approximately £68,789. Your own result depends on your IR35 status, pension contributions and how many days you actually bill.

Limited Company (Outside IR35) — Detailed Breakdown

Annual fees (gross)

£121,000

£550/day × 220 days

Salary drawn

£12,570

At personal allowance

Dividends

£82,611

After corporation tax

Corporation tax

£24,683

On £107,295 profit

Dividend tax

£20,055

Personal tax on dividends

Take-home pay

£75,127

Per year after all taxes

Frequently Asked Questions

How much do I take home on £550 per day as a limited company?

At £550 per day (£121,000 annual gross over 220 working days), a limited company director outside IR35 takes home approximately £76,973 in 2026/27. This assumes a £12,570 salary with remaining profits extracted as dividends, giving an effective tax rate of around 36.4%.

What is the difference between PAYE and a limited company at £550 per day?

On £550/day, PAYE takes home £76,219 versus £75,127 for a limited company (outside IR35) — a difference of £1,093 per year. At this income level, the combined burden of Corporation Tax and dividend tax exceeds PAYE income tax and NI, making PAYE the more tax-efficient structure. The April 2026 dividend tax increase contributed to this crossover.

Does IR35 affect my take-home pay at £550 per day?

Yes, significantly. Inside IR35 at £550/day, you take home approximately £68,789 — around £6,338 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.

Who typically charges £550 per day?

£550 a day is typically commanded by senior specialists and technical leads, such as senior / lead developer, data engineer, scrum master / agile coach and senior project manager. It is most common in fintech and banking, data platforms, public sector transformation and media and broadcasting. £550 a day reflects senior specialists and emerging technical leads. Data engineers, lead developers, and experienced scrum masters frequently command this rate. It is the upper end of the mainstream senior-developer band, where deep domain or platform expertise begins to push rates higher.