Contractor Day Rate Calculator
Convert a target salary into an equivalent contractor day rate.
About this calculator
Moving from employment to contracting? A day rate is not a salary divided by 260 working days. Employees receive holiday pay, sick pay, employer pension contributions, employer National Insurance and paid gaps between projects — contractors fund all of that themselves and typically bill only 200–230 days a year. This calculator converts a target salary into an equivalent day rate by applying an uplift for those lost benefits and dividing by the days you will realistically bill.
The formula
Worked example
To match a £60,000 salary with a 25% uplift and 220 billable days:
- Target income = £60,000 × 1.25 = £75,000
- Day rate = £75,000 ÷ 220 = £341/day
Common mistakes
- Using 260 billable days — bank holidays, holidays, sickness and bench time reduce it to roughly 220 or fewer.
- Setting the uplift to zero and effectively taking a pay cut for more risk.
- Ignoring IR35/employment-status implications, which materially change the economics of a contract.
Frequently asked questions
Assumptions & limitations
Tax is not modelled; the salary you enter is gross. The uplift is your estimate of the value of lost employment benefits and idle time.
Sources & verification
This calculator applies the standard formula published above to the figures you enter — it relies on no external statutory data. The formula and the worked example were checked by hand against each other.
Spotted an error or an out-of-date figure? Report it — corrections are prioritised over all other work (see our corrections policy).