£850 Per Day: Take-Home Pay Breakdown (2026/27)

Q: How much do I take home on £850 per day as a limited company?

At £850 per day (£187,000 pa, 220 days), a limited company director outside IR35 takes home approximately £111,022 in 2026/27 — an effective tax rate of 40.6%. This assumes a £12,570 salary with remaining profits paid as dividends.

Q: What is the difference between PAYE and a limited company at £850 per day?

On £850 per day, PAYE takes home £110,268 versus £105,626 for a limited company (outside IR35) — a difference of £4,641 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 £850 per day generates £187,000 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	£187,000	£38,065	£0	£42,173	£105,626	42.9%
PAYE Employee / Umbrella	£187,000	£70,982	£5,751	—	£110,268	41.0%
Limited Company Inside IR35	£187,000	£56,640	£5,113	—	£93,377	45.1%
Sole Trader Most efficient	£187,000	£70,982	£4,997	—	£111,022	40.6%

Based on 220 working days (£187,000 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 £850 per day?

Is £850 per day a good rate?

£850 a day is a high specialist and leadership rate. It typically reflects principal consultants, lead enterprise architects, and senior transformation specialists. At this level contracts are often won on reputation and a specific track record rather than advertised openly.

Worked example

A principal consultant on £850 a day grosses around £187,000 annually. The figures below show how corporation tax and additional-rate dividend tax combine for a limited company at this income — and how that compares to taking the same fee through an umbrella under PAYE.

Over 220 working days, £850 per day comes to £187,000 in gross fees. As a limited company outside IR35 that leaves roughly £105,626 in your pocket after Corporation Tax, dividend tax and National Insurance — an effective tax rate of around 42.9%. The same fees taken through an umbrella under PAYE would return about £110,268, while inside IR35 the figure falls to approximately £93,377. 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)

£187,000

£850/day × 220 days

Salary drawn

£12,570

At personal allowance

Dividends

£131,121

After corporation tax

Corporation tax

£42,173

On £173,295 profit

Dividend tax

£38,065

Personal tax on dividends

Take-home pay

£105,626

Per year after all taxes

Frequently Asked Questions

How much do I take home on £850 per day as a limited company?

At £850 per day (£187,000 annual gross over 220 working days), a limited company director outside IR35 takes home approximately £111,022 in 2026/27. This assumes a £12,570 salary with remaining profits extracted as dividends, giving an effective tax rate of around 40.6%.

What is the difference between PAYE and a limited company at £850 per day?

On £850/day, PAYE takes home £110,268 versus £105,626 for a limited company (outside IR35) — a difference of £4,641 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 £850 per day?

Yes, significantly. Inside IR35 at £850/day, you take home approximately £93,377 — around £12,249 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 £850 per day?

£850 a day is typically commanded by senior enterprise architects and principal-level consultants, such as lead enterprise architect, principal management consultant, senior transformation lead and specialist AI consultant. It is most common in enterprise architecture, management consultancy, AI and data strategy and investment banking. £850 a day is a high specialist and leadership rate. It typically reflects principal consultants, lead enterprise architects, and senior transformation specialists. At this level contracts are often won on reputation and a specific track record rather than advertised openly.