Umbrella Company Calculator

Estimate a contractor's take-home pay through a UK umbrella company from the day rate.

Day rate paid to the umbrella	£400
Days worked per year	220
Umbrella margin per week	£25
Your pension contribution	5 % of gross

Day rate paid to the umbrella

Days worked per year

Umbrella margin per week

Your pension contribution

% of gross

Take-home pay

£52,200

£4,350 a month, 59.3% of the £88,000 paid to the umbrella. Employer NI £10,607, apprenticeship levy £379 and margin £1,300 come off before your gross salary of £75,714 (which includes holiday pay).

Where the money goes

Margin1%: £1,300
Employer NI12%: £10,607
Apprenticeship levy0%: £379
Income tax18%: £16,203
Employee NI4%: £3,525
Pension4%: £3,786
Take-home59%: £52,200

About the Umbrella Company Calculator

An umbrella company employs contractors and pays them through PAYE. Out of the assignment rate it deducts its margin and the employer's costs (employer National Insurance at 15% above £5,000 a year and the 0.5% apprenticeship levy) before your gross salary, from which income tax, employee NI and pension come off. Holiday pay is usually included in the gross. Since April 2026, recruitment agencies are jointly liable for umbrella PAYE, so check any scheme promising much higher take-home.

The formula

Gross = (assignment − margin + £750) ÷ 1.155; take-home = gross − pension − income tax − NI

Worked example

Example: Take-home pay = £59,962

Inputs: Day rate paid to the umbrella: £440; Days worked per year: 240; Umbrella margin per week: £28; Your pension contribution: 6 % of gross.
Formula: Gross = (assignment − margin + £750) ÷ 1.155; take-home = gross − pension − income tax − NI
Result: Take-home pay = £59,962

Questions people ask

Why is it lower than a salaried job?

The contractor's rate has to cover employer costs that employers normally pay on top.

Is a limited company better?

Inside IR35 you must use PAYE; outside IR35 a limited company may be more tax-efficient.

Sources

The rules and rates this calculator uses come from the official pages below. Its results are estimates, not an official determination, and rules change, so check the latest figures there before you act on them.