IR35 & Contracting
IR35 Salary Equivalent Calculator
Convert a contract day rate into an estimated permanent gross salary equivalent after tax, benefits, pension, and unpaid leave assumptions.
Equivalent permanent gross salary
£108,614.72
£9,051.23 monthly gross. Tax year 2026/27.
Salary equivalent breakdown
- Annual contract revenue
- £126,500.00
- Estimated contract take-home
- £69,767.31
- Equivalent monthly salary
- £9,051.23
- Value of benefits
- £12,000.00
- Difference between paths
- -£12,000.00
How to use this salary equivalent calculator
Enter the contract day rate, IR35 status, working pattern, unpaid leave, pension assumption, benefits value, and tax year. The result estimates the permanent gross salary needed to match the contract outcome plus benefits.
Methodology and formula
The calculator first estimates contract take-home. It then searches for the gross permanent salary whose net salary plus benefits value equals that contract result.
contract_value = contract_take_home
salary_equivalent = gross_salary where net_salary + benefits = contract_value + benefitsExample calculation
A £550 day rate with 230 possible working days can look high, but unpaid leave and inside IR35 costs can narrow the gap with permanent employment once benefits are valued.
Important considerations
Salary equivalence depends on benefits, paid leave, pension, job security, downtime, training budget, client concentration risk, insurance, and non-billable time. No calculator can price every personal trade-off.
FAQ
Should I include employer pension contributions in benefits?
Yes, if you are comparing total value. Include employer pension match, health cover, bonus expectation, insurance, and other reliable benefits.
Does this include unpaid gaps between contracts?
Only if you reflect them through working weeks or unpaid leave days.
Related tools
IR35 Take-Home Pay Calculator, Inside IR35 Calculator, and IR35 Day Rate Calculator.
Disclaimer
Results are estimates and are not tax, financial, legal, employment, or career advice. Verify assumptions before making decisions.