Multiply your day rate by the number of days you work in a year. That's the whole calculation, and the tricky part is picking the number of days. An employee is paid for holidays, so the answer is rate times 260. A contractor isn't, so it's rate times something nearer 232. On £300 a day that gap is £8,400 a year.
260 if you're paid for holidays, about 232 if you're not.
Enter a day rate to see the yearly figure.
A year has 52 weeks, and at five days a week that's 260 weekdays. If you're an employee on a salary, you're paid for all 260, including your holiday. The day rate in your contract is simply your salary divided by 260.
Contractors and freelancers invoice only for days they work. GOV.UK says most workers on a five-day week must get at least 28 days' paid annual leave, and that bank holidays can count towards that. Take 28 off 260 and you get 232. That's a reasonable figure if you take the legal minimum off and nothing else. Add a few sick days or gaps between contracts and 220 is a more cautious number.
Which figure is right for you depends on how much you'll realistically bill, not on a rule. Try your own number in the box above.
Annual income before tax at three different counts of working days. The last column shows what an employee on that equivalent salary would take home after Income Tax and National Insurance.
| Day rate | Salary at 260 days | Contractor at 232 days | Cautious at 220 days | Take-home if employed (260 days) |
|---|---|---|---|---|
| £150 | £39,000 | £34,800 | £33,000 | £31,600 |
| £200 | £52,000 | £46,400 | £44,000 | £40,717 |
| £250 | £65,000 | £58,000 | £55,000 | £48,257 |
| £300 | £78,000 | £69,600 | £66,000 | £55,797 |
| £350 | £91,000 | £81,200 | £77,000 | £63,337 |
| £400 | £104,000 | £92,800 | £88,000 | £70,077 |
| £450 | £117,000 | £104,400 | £99,000 | £75,017 |
| £500 | £130,000 | £116,000 | £110,000 | £80,686 |
| £600 | £156,000 | £139,200 | £132,000 | £94,466 |
Gross annual income = day rate times days. Take-home: England, tax year 2026/27, standard 1257L code, no student loan or pension. Calculated by Salary Checker UK.
As an employee paid for 260 days, £300 a day is £78,000 a year. As a contractor billing 232 days it's £69,600.
The employee figure leaves £55,797 after tax and National Insurance. The contractor figure isn't comparable like for like, because self-employed and limited company tax work differently.
Going the other way, divide a salary by the number of days. This matters when you're deciding what to charge. A contractor who wants to match a permanent salary needs a higher day rate than the simple division suggests, because they won't be paid for holidays or sick days.
Enter a salary to see the matching day rate.
| Salary | Day rate at 260 days | Day rate at 232 days | Day rate at 220 days |
|---|---|---|---|
| £30,000 | £115.38 | £129.31 | £136.36 |
| £40,000 | £153.85 | £172.41 | £181.82 |
| £50,000 | £192.31 | £215.52 | £227.27 |
| £60,000 | £230.77 | £258.62 | £272.73 |
| £80,000 | £307.69 | £344.83 | £363.64 |
| £100,000 | £384.62 | £431.03 | £454.55 |
Gross figures. The 260-day column is the employee equivalent; the lower columns are the rate a contractor needs to bill to earn the same before tax.
Day rates also don't cover what an employer pays on top of salary, such as pension contributions or employer National Insurance. If you're comparing a contract with a permanent role, work out the take-home on each. Our salary calculator does the permanent side, and the freelance tax calculator and dividend calculator cover contracting through self-employment or a limited company.
For an hourly figure, divide the day rate by the hours in your day. On a 7.5-hour day, £300 is £40.00 an hour. On an 8-hour day it's £37.50. The hourly wage calculator converts that to a salary and take-home, and the pro-rata calculator handles part-time and reduced days.
Short answers on converting between day rates and annual pay.
Multiply the day rate by the days you work in a year. For an employee paid for holidays that's 260 days, so £300 a day is £78,000. For a contractor who only bills days worked it's typically around 232, which gives £69,600.
Fifty-two weeks of five days is 260 weekdays. GOV.UK says most workers on a five-day week get at least 28 days of paid leave, and bank holidays can count towards it, so a contractor billing every other day would work about 232 days.
Divide by 260 and £50,000 is £192.31 a day. A contractor billing 232 days needs £215.52 a day to earn the same before tax, because holidays aren't paid.
A contractor isn't paid for holiday, sick days or gaps between contracts, and doesn't get employer pension contributions. The day rate has to cover all of that, which is why it needs to be higher than salary divided by 260.
If you're an employee paid through PAYE, yes. Income Tax and National Insurance work the same way on the annual total. If you invoice as a sole trader or through a limited company, the rules differ, and our freelance tax and dividend calculators cover those.
Divide by the hours in your working day. On a 7.5-hour day £300 is £40.00 an hour, and on an 8-hour day it's £37.50.
The annual figures are rate times days. The 28 days of paid leave comes from GOV.UK. Take-home uses confirmed 2026/27 HMRC rates.
Gross figures unless stated. Take-home assumes an employee in England, Wales or Northern Ireland on a 1257L code with no student loan or pension. Compiled by Salary Checker UK, last updated 28 October 2026. This is general information, not financial advice.