Contractor Day Rate vs Salary Calculator
Compare a contractor day rate with a permanent salary, accounting for pension, bonus, paid leave, benefits and your operating costs. Enter your figures to see the gross difference.
Contractor
Permanent role
Gross comparison
Gross comparison only — no tax. Contractor revenue is not directly equivalent to an employment package. You estimate your own benefits, costs and billable time.
Difference (contractor − salary package)
+£2,000
Gross comparison only — no tax, National Insurance or country-specific assumptions. You enter every benefit and cost estimate yourself; this tool gives no tax advice.
A gross comparison, not a full package
This is a gross financial comparison only. It annualises a contractor day rate and sets it against a permanent salary plus the benefits you value, then shows the difference. It does not value the things that make a salary package more than its headline on its own — use it as a starting point, not a verdict.
What is and isn't counted
The contractor side uses your day rate, billable days and billable weeks, then subtracts your operating costs. The salary side adds the annual employer pension, bonus and the value of paid leave and benefits you enter. Nothing is fixed — you estimate every benefit and cost yourself, so the comparison reflects your real situation. No tax, National Insurance or country-specific assumptions are applied.
Why multiplication alone is not enough
Multiplying a day rate by working days gives a gross annual figure, but a permanent salary is paid for holidays, sickness and often pension and benefits that a contractor funds from their own gross. This tool lets you enter those values so the comparison is fairer — but it is still gross, with no tax.
Formula
contractorGross = dayRate × billableDays × billableWeeks contractorNet = contractorGross − operatingCosts salaryPackage = salary + pension + bonus + benefits difference = contractorNet − salaryPackage
Worked example
- ›Day rate £400 × 5 days × 48 weeks = £96,000 contractor gross
- ›Less £4,000 operating costs = £92,000 contractor revenue after costs
- ›Salary £80,000 + £3,000 pension + £2,000 bonus + £5,000 benefits = £90,000 package
- ›Difference = £92,000 − £90,000 = +£2,000 (contractor ahead)
Frequently asked questions
How do I compare a day rate with a salary?
Enter your day rate, billable days and weeks, the permanent salary, and the annual value of pension, bonus, paid leave, benefits and your operating costs. The calculator shows the gross difference.
How many billable days should I enter?
Enter the days you actually bill in a typical week, and set billable weeks per year to your paid weeks — lower it for unpaid holiday and gaps between contracts.
Does it value pension and benefits?
Only the values you enter. Estimate the annual employer pension, bonus and the value of paid leave and benefits, and they are added to the salary side.
Does this tool give tax advice?
No. It is a gross comparison with no tax, National Insurance or country-specific assumptions. For after-tax figures, use a dedicated tax or net-pay calculator.