How it’s worked out
There are about 260 working days in a year. Take off 25 days' holiday and 8 bank holidays and you're left with 227. Allow a few days for sickness, training and gaps between contracts and most contractors bill around 220 days, which is the default here.
Multiply your day rate by your billable days to get your yearly contract value. To turn a permanent salary into a day rate, divide it by the same number of days. That puts both on the same footing before tax.
A like-for-like comparison needs more than the headline figures. A permanent salary comes with paid holiday, employer pension contributions (often 3% to 10%), sick pay and sometimes a bonus or private health cover. As a contractor you pay for those yourself and carry the risk of gaps. A common rule of thumb is that a day rate needs to be roughly salary ÷ 150 to match a perm package.
For your actual take-home after tax, use the take-home calculator, which compares a limited company with an umbrella.
Questions
How many days a year do contractors work?
Usually 210 to 230 billable days. 220 is a sensible planning figure once holidays, bank holidays and gaps are taken out.
What day rate matches a £70,000 salary?
£70,000 ÷ 220 days is about £318 a day before tax, but you'd need more to cover holiday pay, pension and gaps. Many contractors aim for salary ÷ 150, about £467.
These figures are estimates for guidance only and aren’t financial or tax advice. Speak to an accountant before making decisions.