Contract To Perm Calculator UK
This page converts a contractor day rate into a permanent salary equivalent so you can compare like with like before accepting a move back into employment. It is aimed at contractors, hiring managers and recruiters who need a fair benchmark rather than a headline rate guess.
The result is especially useful when a contract role looks lucrative until you price in paid leave, pension, employer cost and tax treatment.
Convert day rate to a permanent salary
Use your expected billable weeks and any benefits or pension assumptions. The result only appears after you click calculate.
Equivalent permanent package
How this calculator works
The annual contract revenue is calculated from day rate multiplied by billable weeks and days worked. That revenue is then translated into an approximate permanent salary by allowing for employer-side pension, employer National Insurance and a standard employment cost structure.
This gives you a cleaner benchmark for negotiations. A £450 day rate might sound obviously superior to a £70,000 salary until you consider holiday pay, sick leave, pension and notice protection.
Worked example
At £450 a day for 46 weeks of five-day work, the contract side generates substantial gross revenue. But when you ask what permanent salary would create a comparable overall employer spend, the answer is usually lower than day-rate arithmetic implies and higher than a simple annualised gross take-home comparison.
That is the right way to use the result: as a benchmark for offer design and negotiation, not as a promise that contract and permanent work will feel identical month to month.
2025/26 rates, thresholds, and inputs
The calculator is intentionally transparent: it tells you which variables are creating the difference so the number is easier to defend in a negotiation.
| Assumption | Use in the model |
|---|---|
| Billable weeks | Replaces unrealistic 52-week invoicing |
| Employer pension | Approximates a common permanent benefit |
| Employer NI | Included as part of employment cost |
| Benefits value | Adds back insurance or allowance |
| Take-home estimate | Uses UK income tax and employee NI |
Edge cases and assumptions
- Inside-IR35 and outside-IR35 contracts behave differently in real life.
- Very short high-rate specialist contracts may justify a premium beyond any permanent comparison.
- Contract roles with long gaps between assignments should use fewer billable weeks.
- The tool does not price non-cash factors such as autonomy or training budget.
FAQs
Why convert a day rate to a permanent salary?
Because permanent and contract work package value differently. A contractor day rate does not include paid holiday, pension or the security of permanent employment.
Can a lower salary still be a fair permanent offer?
Yes. If the permanent role includes pension, bonus, leave and other benefits, the total package may be closer than the base salary suggests.
Does this replace a detailed IR35 review?
No. It is an offer-comparison tool, not a status determination tool.
Sources and methodology
The salary-equivalent model is based on standard UK employer-cost assumptions for 2025/26 and is intended for comparison, not payroll processing.
Permanent take-home is estimated using current UK employee tax and National Insurance treatment.