Contractor Take-Home From a GBP 450 Day Rate 2026/27

From day rate to take-home

A headline day rate tells you very little about what you keep. For a contractor working outside IR35 through a limited company, the money passes through corporation tax first, then dividend tax, before it reaches your bank account. This walkthrough uses verified 2026/27 figures.

Assume a GBP 450 day rate, 220 billable days in the year, and a sole director with no other income.

Step 1: company income and expenses

• Gross fees: GBP 450 x 220 = GBP 99,000.
• Allowable expenses (accountancy, software, business insurance, some travel): assume GBP 4,000.
• A director salary of GBP 12,570, set at the personal allowance.

Company profit before corporation tax: GBP 99,000 - GBP 4,000 - GBP 12,570 = GBP 82,430.

Step 2: corporation tax

With profit of GBP 82,430 and no associated companies, the company is in the marginal band between GBP 50,000 and GBP 250,000.

• Tax at the 25% main rate: GBP 82,430 x 25% = GBP 20,607.50.
• Marginal relief: (GBP 250,000 - GBP 82,430) x 3/200 = GBP 167,570 x 0.015 = GBP 2,513.55.
• Corporation tax due: GBP 20,607.50 - GBP 2,513.55 = GBP 18,093.95.

Profit available as dividends: GBP 82,430 - GBP 18,093.95 = GBP 64,336.05.

Step 3: personal tax on salary and dividends

The GBP 12,570 salary uses the personal allowance, so no income tax on it. As a sole director with no staff, assume no Employment Allowance and a small amount of employer National Insurance, ignored here for simplicity to keep the focus on the main flows.

Dividends of GBP 64,336 are taxed after the GBP 500 dividend allowance:

• The basic-rate band runs to GBP 50,270 of total income. Salary uses GBP 12,570, leaving GBP 37,700 of basic-band room.
• After the GBP 500 allowance, GBP 37,200 of dividends fall in the basic band at 10.75% = GBP 3,999.
• The remaining GBP 26,636 of dividends fall in the higher band at 35.75% = GBP 9,522.37.

Total dividend tax: about GBP 13,521.

Step 4: the take-home

• Salary kept: GBP 12,570.
• Dividends after tax: GBP 64,336 - GBP 13,521 = about GBP 50,815.
• Approximate annual take-home: about GBP 63,385 from GBP 99,000 of fees.

Things that move the result:

• Pension contributions paid by the company are deductible and escape both corporation tax and dividend tax.
• A spouse who genuinely works in the business may take a salary or dividends, spreading income.
• Higher expenses reduce corporation tax.
• Inside IR35 status would change the whole calculation.

The bottom line

A GBP 450 day rate over 220 days produces around GBP 99,000 of fees, leaving roughly GBP 63,000 take-home through a limited company in 2026/27 after corporation tax and dividend tax, before any pension planning. Marginal relief and the dividend bands do the heavy lifting.

Run your own rate and days through the calchub.uk contractor and dividend calculators, and confirm corporation tax and dividend rates on gov.uk, especially if your IR35 status is uncertain.