Contractor vs Employee Calculator UK 2025/26
Compare contractor and employee salaries, benefits, and take-home pay. Understand the true financial difference between contracting and permanent employment.
Contractor Benefits
- Higher earning potential (30-50% premium)
- Tax efficiency through limited companies
- Flexible working arrangements
- Variety of projects and clients
- Control over work schedule
Employee Benefits
- Guaranteed monthly income
- Holiday and sick pay included
- Employer pension contributions
- Job security and employment rights
- Career development opportunities
Employee Salary to Contractor Rate Equivalents
| Employee Salary | Contractor Day Rate | Contractor Annual |
|---|---|---|
| £30,000 | £180-220 | £40k-£48k |
| £40,000 | £240-300 | £53k-£66k |
| £50,000 | £300-380 | £66k-£84k |
| £60,000 | £360-450 | £79k-£99k |
| £70,000 | £420-520 | £92k-£114k |
| £80,000 | £480-600 | £106k-£132k |
| £100,000 | £600-750 | £132k-£165k |
* Based on 220 working days per year and includes premium for benefits, holiday pay, and job security
Detailed Benefits Comparison
| Benefit | Contractor | Employee |
|---|---|---|
| Higher daily/hourly rates | ||
| Flexible working arrangements | ||
| Tax efficiency opportunities | ||
| Variety of projects/clients | ||
| Holiday pay | ||
| Sick pay | ||
| Pension contributions | ||
| Job security | ||
| Career development funding | ||
| Statutory employment rights |
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