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Salary to Day Rate Calculator (UK)
What day rate would you need to match your current perm salary? Includes the benefits-uplift adjustment most online converters forget, your salary number isn't your total compensation.
Reviewed 27 April 2026 · 2026/27 rates verifiedEquivalent day rate
£327.27/day
£72,000 total comp at 20% benefits uplift, 220 working days
Show full breakdown
Sensitivity to working-days assumption
| 200 days£72,000 total comp | £360.00/day |
|---|---|
| 220 days£72,000 total comp | £327.27/day |
| 240 days£72,000 total comp | £300.00/day |
| 250 days£72,000 total comp | £288.00/day |
Bolded row matches your input. The £327.27/day answer is for 220 working days.
How the conversion works
Two adjustments stand between your headline salary and the equivalent day rate. Most online calculators get one wrong and skip the other; the page-by-page numbers below explain both.
Adjustment 1: Benefits uplift
A perm £60k role typically comes with 15–25% of soft compensation: employer pension contribution (5–10% of salary), paid holiday (5–6 weeks), sick pay, employer NI paid on your behalf (15% above £5,000), sometimes private medical, life cover, training budget, share scheme. Total comp is closer to £72,000 (at a 20% uplift). For like-for-like comparison with contractor income (which includes none of these), you have to add the uplift back BEFORE calculating the day rate.
Adjustment 2: Realistic working days
UK contractors do not bill 250 days a year. The realistic number is closer to 220, 5-day weeks minus ~6 weeks of unpaid leave (4 weeks holiday + bank holidays + the inevitable sick day). Many online calculators silently assume 250, which understates the required day rate by ~14%. If you're aggressive about taking work year-round you might hit 240; 200 is realistic if you plan a couple of months off.
The full formula
equivalent day rate = (perm salary × (1 + benefits uplift)) ÷ working days per year
Worked example: £60,000 perm × 1.20 (20% benefits) ÷ 220 days = £327/day break-even. Compare that to the £240/day a 250-days-no-uplift calculator would tell you, same perm role, 36% different conclusion.
Why the equivalent rate isn't the goal
The number this calculator returns is the BREAK-EVEN day rate, the rate at which contracting income matches your current total comp on a pre-tax basis. Most contractors target 20–40% above break-even to compensate for income volatility (rough years hit harder), lost benefits during gaps, IR35 risk if outside, admin overhead, and the absence of automatic annual pay rises. Use the calculator output as the floor, not the target.
What this calculator doesn't cover
- Tax differential: both sides are at gross level. The contracting tax differential (umbrella vs Ltd vs PAYE) is meaningful but situation-specific. Use the take-home, umbrella, or Ltd calculators for net comparison.
- Equity / RSU compensation: large at FAANG and similar. Add fair value to the benefits uplift if your package includes meaningful equity.
- Income volatility risk: the calculator gives a steady-state equivalent. Real contracting income varies between contracts; rough years hurt more than good years help. Build a 6-month cash buffer before switching.
- Defined-benefit pensions: Civil Service, NHS, teaching, and some FTSE 100s offer DB pensions worth 25–40% of salary in deferred-comp terms. Going contracting sacrifices this; factor into the benefits uplift.
- Mortgage and credit access: first 2 years of contracting are harder for borrowing (need 2 SA302s). See the self-employed mortgage calculator for the realistic picture.
- Statutory benefits: SSP, maternity / paternity, redundancy. All gone if you're a contractor (varies slightly by route, umbrella retains some).
- Career-progression value: perm roles typically have a defined progression ladder; contractor day rates are sticky once set, so career growth is via getting a different (higher-rate) contract rather than internal promotion.
Frequently asked questions
- Why does my £60k salary need a day rate higher than £60,000 ÷ 220?
- Two reasons. First, your perm £60k comes with a soft compensation package, pension contribution (typically 5–10% of salary), paid leave (5–6 weeks), sick pay, employer NI on your behalf, sometimes private medical. Total comp is closer to £72,000 (20% uplift). Second, contractors don't bill every working day, 220 days is realistic, not 250. So the maths is £72,000 ÷ 220 = £327/day to match like-for-like, not £60,000 ÷ 250 = £240/day. Most online converters skip both adjustments and quote you £240, which understates by 36%.
- Should I aim higher than the equivalent day rate?
- Yes, the equivalent rate is the BREAK-EVEN, not the GOAL. Real reasons to aim 20–40% higher: (1) buffer for actually being lower than 220 days in a bad year (gaps between contracts), (2) compensation for income volatility (a rough year hurts more than a good year helps), (3) compensation for IR35 risk if you go Ltd outside, (4) covering any new costs (accountancy ~£1,200/year, professional indemnity insurance ~£200, IR35 insurance ~£300), (5) no automatic annual pay rise, contractor day rates are sticky, so getting to a higher rate up-front matters. A common rule of thumb: take the calculator's break-even and add 25%.
- What benefits-uplift % should I use?
- Depends on your perm package. Conservative (no perks): 10–15%. Average UK private-sector perm: 20% (5% pension match, 5–6 weeks paid holiday, sick pay, employer NI). Generous package (banking, big tech, civil service grade 7+): 25–35% (10%+ pension match, full sick pay scheme, private medical, life cover, share scheme, training budget). Public sector with the LGPS pension: 30–40% if you'll be giving up the defined-benefit pension to go contracting (DB pensions are worth a LOT, a typical Civil Service pension is worth maybe 25% of salary in deferred-comp terms).
- I'm not sure I'd actually leave perm, what's the realistic risk?
- Income volatility is the big one. As a perm you have 12 reliable monthly paychecks regardless of business activity; as a contractor you might have 10 great months and 2 with no contract. The £/day calculator gives you the steady-state equivalent but doesn't reflect the variance. Practical buffer: 6 months of living expenses in cash before going contracting. Other risks: lender treatment for mortgages/credit (worse for the first 2 years until you have SA302s), no statutory sick pay or maternity/paternity, having to do your own admin (10–30 hrs/year), and the possibility of HMRC retrospective IR35 challenges if you're outside.
- Does this account for tax?
- No, both sides of the comparison are at the GROSS level. The salary input is your gross pay; the equivalent day rate is what you'd need to invoice (also gross). The actual tax differential between perm PAYE and contracting depends heavily on your route (umbrella vs Ltd) and your specific numbers. Once you have an equivalent day rate from this calculator, plug it into the inside-IR35 umbrella calculator (for inside contracts) or the outside-IR35 Ltd calculator (for outside) to see the net take-home comparison.
- What about a £100k+ salary, does the calculator still work?
- The arithmetic still works (£100k × 1.20 / 220 = £545/day at standard assumptions). The thing the calculator doesn't capture: above £100k you'd be in the personal-allowance-taper zone as a perm (60% effective marginal rate). Through a Ltd you can sometimes structure around this. So the day rate that gives you the same NET take-home through a Ltd might be lower than the calculator's gross-equivalent figure, at high salaries the Ltd structure has tax advantages the gross-comparison hides. Use the umbrella-vs-limited calculator to see the net difference at your target day rate.
- What if my perm gives me share options or RSUs?
- Add their fair-value to the benefits uplift. A FAANG-grade £150k cash + £150k RSU package needs to be modelled as £300k total comp; converting only the £150k cash would dramatically undersell. The catch: equity comp is illiquid (vesting schedules, lock-ups) and risky (stock-price drops), so a contractor day rate matching the same nominal value isn't the same risk profile. For RSU-heavy comp, treat the equity portion at maybe 70% of headline value to account for vest delay + price volatility risk.
- How does this differ from the day-rate-to-salary calculator?
- Same maths, opposite question. The day-rate-to-salary calculator (anchor #4) is for contractors asking 'I quote £500/day, what perm salary is that worth?'. This calculator is for permanent employees asking 'I'm on £60k, what day rate would match?'. They use the same lib/tax/day-rate-conversion.ts engine, the answers reconcile exactly when you flip the inputs. Pick whichever framing matches your situation.
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Reviewed: 27 April 2026 · See how we calculate · not financial advice.