Turn a contractor day rate into an equivalent annual salary.
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What this calculator covers and how the numbers are worked out
This calculator is for contractors, freelancers and interim workers who are paid a day rate rather than a salary, and want a realistic idea of what that translates to over a full year. Enter your day rate and the number of days you expect to bill, and it multiplies the two together to give you an annual figure you can compare against a salaried job offer or use for budgeting.
The maths itself is simple - annual earnings equal your day rate multiplied by the number of billable days you actually work - but the number of billable days is where most people go wrong. A full-time employee's salary already has their paid holiday, bank holidays and sick pay built in, so it is easy to assume a contractor working five days a week for a year would bill something close to 260 days (52 weeks x 5 days). In practice almost no contractor bills anywhere near that many days.
Contractors are not paid for the days they do not work. That includes annual leave, the 8 UK bank holidays, sick days, and any gap between one contract ending and the next one starting. Once you take those out of 260 working days, a commonly used planning figure is around 220 billable days a year - allowing for roughly 20 days of holiday, 8 bank holidays, and a bit of downtime finding new work.
As a worked example, a contractor charging a day rate of £450 who bills 220 days in the year would earn 450 x 220 = £99,000 for the year. If that same contractor optimistically assumed all 260 working days were billable, the figure would look like 450 x 260 = £117,000 - a difference of £18,000 that exists only on paper, because those extra 40 days are never actually worked or paid.
Your IR35 status can make a significant difference to how much of that headline day rate you actually keep. Working 'inside IR35' generally means your income is taxed more like employment income, with tax and National Insurance deducted at source, while working 'outside IR35' usually gives more flexibility over how you are paid, for example through a limited company. This tool does not work out IR35 status or its tax effects - it is outside the scope of a simple day-rate calculator - so treat the figure here as your gross contracting income before you think about how it will be taxed.
Day rates are also usually quoted excluding VAT. If you are VAT-registered, you will add VAT on top of your invoices, but that VAT is not your income - you collect it and pass most or all of it on to HMRC, so do not include it when working out your annual earnings.
A common mistake is treating the annual figure from this calculator as directly comparable to a salaried role on the same headline number. As a contractor you are also covering your own holiday pay, sick pay, pension contributions, training and the risk of gaps between contracts, none of which a salary figure needs to account for separately.
260 is the number of weekdays in a typical year, but it assumes you bill every single one of them with no holiday, no bank holidays, no sick days and no gap between contracts. Almost no contractor achieves that in practice, which is why a lower figure such as 220 days gives a more realistic annual estimate.
It's a commonly used planning estimate that starts from 260 working days a year and takes off roughly 20 days of holiday, 8 bank holidays, and some allowance for downtime between contracts. Your own figure could be higher or lower depending on how much work you actually secure.
Quite a lot. At a £450 day rate, billing 220 days gives £99,000 a year, while billing 260 days gives £117,000 - an £18,000 difference from the days assumption alone, before any tax is considered.
Usually not. Day rates are normally quoted excluding VAT, so if you are VAT-registered you add VAT on top of your invoices separately - it should not be included as part of your income when using this calculator.
It can affect how much of your day rate you keep after tax, but not the headline annual earnings figure itself, which is simply day rate multiplied by days worked. Your IR35 status is a separate question this tool does not attempt to answer.
Not exactly. A salaried job usually includes paid holiday, sick pay, employer pension contributions and other benefits that a contractor has to fund themselves out of their day rate, so the same headline annual figure is not quite like-for-like.
Then your realistic billable days will be lower than 220, so it's worth entering a more cautious figure - for example 180 or 200 days - if gaps between contracts are common in your line of work.
Yes. Just enter the number of days you actually expect to work and bill in the year, whether that's two days a week or five, and the calculator multiplies it by your day rate as normal.
These results are estimates for general guidance and are not financial advice. Always confirm important figures with an official source.
Rates last reviewed: 2 October 2026 · Built around the 2026/27 UK tax year
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