How much can I earn as a contractor?

Limited or Permanent Employee?

Another page we are sure you will find incredibly useful is: Take home pay Limited company or Umbrella company - The Real Story.

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.

Our free 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.

If you would like to know more about working through your own limited company please read one of our many FREE to download guides, speak to a one of SJD's Client Liaison Managers on 0500 152500 (01442 275789) or read our two minute guide to contracting through your own limited company.

SJD Accountancy

SJD Accountancy are the UK's largest specialist provider of fixed fee, limited company accountancy services to contractors; we've been acting for contractors across the UK since 1992 and have more than 11,000 clients.

We are the only National specialist firm of accountants with offices in all major UK cities so you’ll never be far from your accountant. SJD also have more qualified staff than any other firm in our market with qualifications from the following major tax and accountancy bodies - ATII, ATT, ACCA, CA, ACA, FCCA, ACMA. You’ll also be pleased to know that we are one of the lowest priced as well.

SJD have also won every relevant industry award possible, including:

The British Accountancy Award Winners 2011 for ‘Accountant of the Year’.
Winners of the Accountancy Age Awards for Excellence in 2007 and 2004, finalists in 2010 and all years since 2003.
Four time winners of the 'Best Contractor Accountant' award voted for by visitors to Contractor UK 2010 to 2007.
Winners of the "Sunday Times Best Small Companies to Work For in the UK" Award, achieving the highest position ever for a firm of accountants.
'Excellence in Customer Service' - Finalists National Chamber of Commerce Awards 2008.
'Business of the Year' - Finalists National Chamber of Commerce Awards 2008.
'Outstanding Three Star Status' - Best Companies Accreditation 2009.
Award for 'Customer Commitment' at the Institute of Customer Service UK Customer Satisfaction Awards 2011.
Deemed PCG Accredited Accountants and fully MSC compliant.
UK Customer Experience Award for 'Best Professional Team of the Year' 2011.

We offer all clients:

Free face-to-face meetings. This is another unique service, only SJD offers free face to face meetings - tax is complicated and sometimes only a meeting will do.
Unlimited access to your own dedicated accountant. No call centres, no outsourcing, no automated call handling. Simply telephone, e-mail or meet your own dedicated accountant face to face.
Money back service guarantee. All your telephone calls and e-mails will be answered the same day or we will refund your monthly fee's.
Outstanding reputation. We have won more awards for customer service and accountancy excellence than any other firm in our market.
All inclusive low cost monthly package which includes completion of accounts, payroll bureau, dividends and corporation tax computations, personal taxation, free bookkeeping software, unlimited access to your accountant and all company returns.

All this for a fixed monthly fee of £110 plus VAT, which is one of the lowest prices in the market. And most importantly, in a recent survey 98% of our clients rated SJD as 'better than other accountants' - we are working hard to convince the other 2%!

If you have any question about contracting or would like any further advice please either contact your SJD Accountant or call our new client services helpdesk on 0500 152500 / 01442 275789 or e-mail jaime.thorpe@sjdaccountancy.com.

Appoint SJD Accountancy and never worry about your tax or accountancy affairs again!

You may also find the following pages, guides and case studies useful:

Take home pay calculator - How much could you be taking home
Contractor FAQ - All your frequently asked questions and their answers
First time Contracting or Freelancing? - A summary of the alternatives along with pros and cons
Choosing an accountant - For a full review
Step-by-step Guide to Contracting - Download a FREE copy of our guide
Limited or Umbrella? Can't decide? - We help you decide which is best for you
Guide to Contracting - All the best guides to contracting in one place
Expenses Guide - Know exactly what you can claim
Umbrella company guide - Everything you ever wanted to know about umbrella company services
IR35 Guide - A great plain English guide to IR35.