£800/day Day Rate — Salary Equivalent
Your £800/day = £176,000 annual gross · 220 days · PAYE vs Ltd Company · 2025-26
PAYE (employee)
| Gross annual | £176,000 |
| Personal allowance | £0 |
| Income tax | −£66,032 |
| National Insurance | −£5,531 |
| Net take-home | £104,437 |
Ltd Company (outside IR35)
| Revenue (220 days) | £176,000 |
| Salary drawn | −£12,570 |
| Employer NI | −£1,136 |
| Corporation tax | −£39,258 |
| Dividends paid | £123,036 |
| Dividend tax | −£31,931 |
| Net take-home | £103,675 |
Note: Ltd Company figures are estimates. They assume £12,570 salary, no allowable expenses, standard corporation tax rates (19% small profits / 25% main rate), and optimal dividend extraction. Real take-home depends on expenses, accountant fees, IR35 status, pension contributions and timing of dividends. Consult a qualified accountant.
IR35 warning
The Ltd Company figures only apply if your engagement is outside IR35. If HMRC or your client determines you are inside IR35, you pay full PAYE — matching the PAYE column above. See our IR35 calculator to compare inside vs outside IR35 specifically, or the umbrella vs limited company comparison.
£800/day as an annual salary — 2025-26
At £800/day for 220 days per year, your gross annual equivalent is £176,000. A permanent employee on this salary would take home £104,437 after income tax (£66,032) and National Insurance (£5,531). Your effective tax rate as a PAYE employee would be 40.7%.
As a limited company contractor outside IR35, the picture is different. You pay yourself a salary of £12,570 (within the personal allowance — zero income tax, zero employee NI). The company pays employer NI of £1,136 and corporation tax of £39,258. The remaining £123,036 is distributed as dividends, incurring dividend tax of £31,931. Net take-home: £103,675.
The Ltd Company advantage of £762/year (£63/month) reflects the lower effective rate of dividend taxation vs employment income. However, contractors carry costs that employees do not: accountancy, insurance, Companies House fees, and periods between contracts. These typically run £2,000–5,000/year.
Frequently asked questions
What is £800/day as an annual salary?
A £800/day contractor day rate equals £176,000 per year based on 220 billable days. This is your annual gross equivalent. A permanent employee would need a £176,000 salary to match your gross billing — but contractors have extra costs (insurance, accountancy, bench time) so the effective comparison is usually higher.
Is £800/day a good contractor rate?
At £800/day (£176,000/year), a Ltd Company contractor takes home £103,675 — compared to £104,437 PAYE on the equivalent salary. Whether this is a good rate depends on your sector, skills, location and IR35 status. In London, £800/day is a solid mid-senior rate for tech and finance roles. Outside London it may be above market for many roles.
PAYE vs Ltd Company — which is better on £800/day?
On £800/day (£176,000/year), a Ltd Company outside IR35 takes home £103,675 vs £104,437 PAYE — a difference of £762/year (£63/month). The Ltd Company advantage comes from lower dividend tax rates (8.75%/33.75%) vs income tax (20%/40%), and avoiding employee NI (8%) on the dividend portion. However, Ltd Companies have running costs: accountant fees (typically £1,000-£2,500/year), Companies House filing, bank fees, and insurance.
How is Ltd Company take-home calculated?
The Ltd Company calculation assumes: (1) Draw salary of £12,570 (personal allowance — no income tax, NI primary threshold = £12,570 so no employee NI). (2) Pay employer NI of £1,136 on salary above £5,000. (3) Remaining company profit after salary and employer NI is taxed at 19–25% (marginal relief band). (4) After corporation tax of £39,258, £123,036 is distributed as dividends. (5) Dividend tax of £31,931 is due (first £500 free, 8.75% basic, 33.75% higher rate). Net take-home: £103,675.
What should I charge to match a permanent salary?
A rough rule of thumb: divide your target permanent salary by 220 (working days) and multiply by 1.3-1.4 to cover contractor overheads. So for a £60,000 equivalent, you would aim for around £350-£380/day. The table on this page shows exact PAYE take-home for each gross, so you can compare like-for-like.
Does IR35 affect the Ltd Company figures?
Yes, critically. The Ltd Company figures assume you are outside IR35. If your engagement is deemed inside IR35, you pay full PAYE on your invoiced revenue — matching the PAYE column, not the Ltd Company column. Always confirm your IR35 status with a specialist before relying on the Ltd Company figures. See our IR35 calculator for the full comparison.