Contractor take home pay calculator

(5 minutes to read)

As a contractor, your take home pay is the most important thing to you. You want to know how much you will get in your pocket at the end of the week or month, and that you won’t fall foul of HMRC.

Our contractor calculator will give you an idea of how much you can expect to take home, either working through a Limited Company or under an Umbrella. Simply enter your payment details below to see what you could take home working via a Limited Company versus an Umbrella Company. Please find the assumptions here.

If you are new to contracting or thinking about making the switch from permanent employment, check out our handy guides: new to contracting and permanent to contracting or give one of the team a call on 01442 795 100 for a fuller explanation of how it all works.

We have some of the lowest accountancy fees in the industry and our dedicated team has decades’ worth of specialist experience in contractor accounting, so you can rest assured that your take-home pay is in safe hands. To find out more about our fixed fee accountancy package please visit our our services page.

Contractor calculator

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Limited take home pay

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per month

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Limited calculation based on outside IR35

Umbrella take home pay

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per month

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Umbrella Company vs Limited Company

Please find the calculator assumptions here.

For more in-depth information on Limited or Umbrella, we have got a handy guide to help you decide here.

Umbrella Company

An Umbrella Company is often where a freelancer will first dip a toe into the world of contracting. It is quick to register, requires very little administration and is particularly suitable for short-term contracts.

The Umbrella Company acts as your employer, so even though you are contracting, you are classed as a permanent employee in the eyes of HMRC. The Umbrella is responsible for all taxes, levies and deductions from your pay – you will only ever receive your net take-home pay. Because of this, there is little flexibility in how much you can take home, although in certain circumstances you can claim limited expenses to reduce your tax liability.

As well as their own margin, an Umbrella Company will deduct PAYE tax, National Insurance, Employer’s National Insurance and the Apprenticeship Levy. They are also responsible for pension and holiday pay deductions, as well as Student Loan payments. Once all this is taken care of, you can expect to take home 60-65% of your contract income, depending on your rate.

Watch out! Since all employers calculate pay in the same way, any Umbrella Company claiming to offer substantially higher take-home pay is likely to be non-compliant and putting you at risk of a tax bill in the future.

The figures above are an illustration only, using a series of assumptions based on common working patterns. Please find the assumptions here. Your actual take home pay will depend on a variety of factors – for a breakdown of these figures and a bespoke pay illustration, please call us on 01442 795 100 or email who will be happy to explain.


Factors that affect your umbrella take home pay.

All compliant Umbrella Companies calculate your pay in the same way. If you see a take-home pay calculation that gives a noticeably higher figure than others, beware! It’s likely the Umbrella is either factoring in a large amount of expenses into your payment or operating a tax avoidance scheme. Although you will see the benefit in the short term, HMRC are aggressively pursuing users of tax avoidance schemes to reclaim unpaid tax and NICs.

The only factor that should affect your take-home pay is the Umbrella Company’s margin. This margin covers all the Umbrella Company’s operations – you should consider the following when looking at the margin:

How am I paid? Some Umbrella Companies offer same-day payments as standard, others don’t and will charge you extra if you want your money in your account the same day they process payment. As we run a payroll every single working day, providing cleared funds are received into our bank account by 9am, we will make payment to you the same day.

Need help deciding between Limited or Umbrella? We are happy to help- give Sophie a call on 01442 795 100 or email

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Is the margin fixed? Some Umbrellas use a fixed weekly margin, so you know exactly what will be deducted. Others charge a percentage of your invoice value – which can get expensive on higher rates!

What is the service like? Does the Umbrella promise a good level of service and do they actually deliver it? Do they provide a dedicated member of staff for your to deal with, or will you be explaining who you are and what you do every time you call?

Are they compliant? Don’t just take the Umbrella’s word for it – look for awards, accreditations and badges of compliance for peace of mind.

Are they established? A reputable, long-running Umbrella means your money is in safe hands. It is a sad fact that some fly-by-night Umbrella Companies have disappeared along with contractors’ hard-earned money, so don’t take a risk on an unknown operator.

Our award-winning sister company, Contractor Umbrella, are one of the longest-running and most respected names in the industry. If you’d like to know more, visit their website or give them a call on 01206 761 326.

If you think a Limited Company might be a more suitable option, have a look at our Limited or Umbrella guide, give one of our specialist contractor accountants a call on 01442 795 100 or email

Limited or umbrella? Still unsure?

Speak to Sophie on 01442 795100 or email

Email Sophie

Limited Company

Once established or committed to a long-term career in contracting, the vast majority of freelancers set up a Limited Company to handle their income. The main reason is simple – although requiring a bit more admin, the tax advantages mean that a much greater proportion of your hard-earned money ends up in your pocket.

A Limited Company is a separate entity to you – you act as sole Director of the company. With a good accountant, there are ample opportunities for tax planning. Income is typically split between salary and dividends, in a tax-efficient manner. There are also a wider range of allowable business expenses, which reduce your tax liabilities further – see our contractor expenses guide for more information.

A contractor operating through a Limited Company can expect to take home 75-85% of their contract income – there is more variation depending on your circumstances and working patterns, but even with minimal expenses it is a more tax-efficient way of working.

Watch out! If you’re contracting in the public sector or working in the same manner as an employee, you could be caught by IR35 legislation. This can have a negative impact on your take-home pay.

For guidance on what you could take home, check out our online pay calculator. For a bespoke calculation, or just for a bit more information, give one of our specialist contractor accountants a call on 01442 795 100 or drop us a line at

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Why Dolan Accountancy?

With over 25 years experience in contractor accountancy helping thousands of contractors, freelancers and the self employed, Dolan Accountancy has the specialist skills, reputation and credibility you can trust. Working closely with our sister company, Contractor Umbrella, it means we can offer one low cost, fixed fee package at £105 + VAT per month. This gives you the flexibility of using both our Limited Company Accountancy Services and our award winning Umbrella Service, for one inclusive cost. We don’t believe in tiered packages or hidden extra fees, instead we aim to give you everything you need, including:

  • Free Company Formation – This is where it all begins. Once you have decided on an available name, we will form your company free of charge (if using our accountancy services) and it will be ready for you to use in as little as three hours.
  • Free use of Contractor Umbrella – With IR35 Legislation changes we understand that sometimes you are required to contract via an umbrella company. We will keep your limited company ticking over, while you work margin free via our sister company, Contractor Umbrella.
  • A Dedicated Accountant – Your accountant will be there for any company or personal tax advice that you require. We will never outsource work, even to internal teams.
  • Free Access to FreeAgent – The founder behind the multi award winning FreeAgent platform was one of Simon’s first clients, therefore it only seems fitting that we offer all of our clients access to FreeAgent, free of charge.
  • Free Business Banking – We have decided to waive our commission so our clients can use Tide free of charge for the first year.
  • Unlimited IR35 Status Reviews – We will review all of your contracts for IR35 purposes and provide you with our professional opinion as to its status.
  • Free Registered and Director’s Service Office Address – Sometimes you just don’t want your home address on display at Companies House. When you sign up to our accountancy services, we will offer the use of our address as an alternative.
  • Your Business and Personal Taxation Needs – This includes Company Accounts, Director’s Personal Tax Return, VAT Returns, Payroll, Corporation Tax and Dividend advice, to name just a few.

If you’d like to find out more about how Dolan Accountancy can help you and your business, please give us a call on 01442 795100 or email or