How much can I earn as a contractor?

Limited or Permanent Employee?

Firstly, let us say this is not SJD promoting or recommending that any contractor works through their own Limited company. You and only you can make this decision. There are pros and cons for each method of working and all personal situations are different. SJD offer both Limited Company and umbrella services, and therefore are one of the very few firms that can offer impartial advice.

Back to the question, "so how much will I take home as a contractor?" This is without a doubt one of the most common questions we get asked - not really surprising when you consider it’s one of the major reasons people decide to move from the world of the employed to contracting.

Basically, if you are a contractor working through your own Limited company your take home will be anywhere between 75% - 80% of your contract value, for example:

  • Daily rate £200 take home between £150 - £160
  • Daily rate £300 take home between £225 - £240
  • Daily rate £400 take home between £300 - £320
  • Daily rate £600 take home between £450 - £480

Any accountant or tax adviser will tell you that working through your own Limited company is the most tax efficient way of working, meaning you keep more of your hard earned money.

SJD's online contractor calculator provides an illustration of the maximum amount a contractor could take from their contract when working through their own Limited company. It assumes full tax planning and a number of other procedures are in place, some of which are quite complex and are best discussed directly with your accountant.

As mentioned, most clients and contractors working through their own Limited company take home between 75% and 80% of their contract value.