How much can I earn as a contractor?

One of the most important questions for contractors when they move from permanent employment is how much they can expect to take home. Typically, contractors are better paid than permanent employees, which can be a deciding factor in making the decision to contract. However, this figure can differ depending on whether you decide to form a limited company or become an umbrella employee.

Umbrella or limited company 

Depending on whether you decide to work under an umbrella company or establish your own limited company, your take home pay will alter. If you decide to go limited, you can expect to take home around 75-80% of your contract value. This is because working through a limited company is often the most tax efficient way of working, meaning you can take home more of your hard-earned money. 

On the other hand, as an umbrella employee, your take home pay will be approximately 40-50%. This amount will be paid to you after tax, National Insurance contributions and a fee from your umbrella company. You can see more details about the difference between limited and umbrella, including the pros and cons of each, in our guide

Free Contractor Guides

Calculating your take home pay

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.

Support from SJD

Calculating your finances and weighing up your options when it comes to contracting is not always easy, but SJD Accountancy is here to help. Our team have a wealth of experience and can provide the best advice depending on your situation. To speak to one of our new business team, just call 01442 330165 or email

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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 15,000 clients.

We are the only national specialist firm of contractor accountants with offices nationwide. SJD Accountancy has more qualified staff than any other firm in our market with qualifications from the following major tax and accountancy bodies - ATT, AAT, CTA, ACCA, CA, ACA and FCCA.

  • Unlimited face to face meetings. This is a unique service only SJD Accountancy offers - unlimited face to face meetings across the UK - tax is complicated and sometimes only a meeting will do.
  • UK's largest contractor accountants with more qualified staff. No call centres, no outsourcing, no automated call handling. Simply telephone, email or meet your own dedicated accountant face to face.
  • Our Customer Promise. Respond to any question sent to your accountant or any dedicated department within 24 hours.  If we need more time, we will update you as soon as we can and we promise to keep you informed of the progress we are making in answering your question.
  • Outstanding reputation. We have won more awards for customer service and accountancy excellence than any other firm in our market, including: Best Accountant for Contractors, Accountant of the Year and Best Professional Service Team to name just a few.
  • All inclusive low cost fixed fee accountancy package which includes completion of accounts*, payroll bureau, dividends and corporation tax computations, personal taxation, free bookkeeping software, your own dedicated accountant* and all company returns for a fixed fee starting from £120 plus VAT per month. Check our packages for more detail.

If you have any questions about contracting or would like any further advice please call our new business team on 01442 275789 or email: Our new business team is open Monday to Thursday (8am to 8pm), Friday (8am to 7pm) and Saturday (10am to 4pm)

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

Form your own limited company with SJD - our same day online company formation service includes company bank account set up, VAT/PAYE registration and advice on optimum share structure. 

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

*If you would like us to complete your company year end accounts we simply ask that you have been a client of SJD for one year or have made 12 monthly payments. All accountants are part or fully qualified.