Contractor Calculator
Try our free contractor calculator to figure out your net take-home pay. Our calculator is simple to use and will show you an estimate of your payment after taxes, National Insurance contributions and Cool Company’s margin are applied.
How to use the contractor salary calculator
Our contractor salary calculator below estimates how much you will receive as take-home pay after deductions when contracting. Simply enter the following information:
- *You invoice* Enter your umbrella rate.
- Choose from the dropdown menu which country you live in.
- Select your payment schedule either weekly or monthly.
Calculate your salary
You invoice £
What you get: £1,304
You live in:
You bill:
£1,304*
£22.50
| Tax, National Insurance & Pension | |
| Employers NIC | £248.90 |
| Employer Pension | £0.00 |
| Employee NIC | £113.47 |
| Income Tax | £560.85 |
| Employee Pension | £0.00 |
How to calculate your take-home pay with Cool Company
Cool Company offers you a complete service! We take care of all paperwork and handle the invoices to your clients. As soon as your client has paid the invoice and the money has arrived, we will make all required deductions, and pay you the net take-home pay.
3 easy steps from invoice to take-home pay
1. Basic rate
Say you want to know how much to quote your client for your work. To do this you need to understand what your service rate is. First, work out how much your time is worth and how much per hour or per day you want the client to pay for the work you perform. This would be your basic rate.
2. Employer contributions and Cool Company margin
Now you understand your base rate, you will need to uplift your rate to cover employer costs. These costs include Employers National Insurance and Employers Pension (optional). To calculate the uplift, we suggest adding 13.8% of your base rate for Employers National Insurance and 3% of the base rate to cover the Employers Pension contributions.
You may want to add Cool Company’s margin into the costs which are fixed at £22.50 (for weekly payments) or £80.00 (for monthly payments).
3. Income Tax
Once your invoice has been paid, Cool Company will then deduct the uplifted costs detailed above and your National Insurance contributions, pension and Income Tax. Once this has been deducted, we will send you the remaining funds which are your take-home pay.
Income tax is calculated using your HMRC issued tax code; some individuals may have other deductions for student loads or attachment of earnings. All of these are instructed by HMRC.
Cool Company will display all deductions and calculations to you on your payslip.
What influences my take-home pay?
What you invoice to your client is far from the same as what you can take home. In the UK, deductions are set out and calculated by HMRC. Cool Company works with HMRC to ensure all deductions are made and declared.
Here are the most important factors you will have to consider when you want to calculate your take-home pay:
National insurance is a deduction made on your earnings
to qualify for benefits such a state pension, sick pay, or maternity and paternity leave. Your contributions are deposited into your personal National Insurance account.
minimum of 5.6 weeks holiday per year. Holiday is calculated at 12.07% of the gross income and should be included in your service rate quoted to your client.
Income Tax is the tax you pay on your income. How much tax is determined by your personal tax code and the amount you receive; your tax code is set by HMRC.
FAQ
As a contractor, you need to consider both taxes and National Insurance contributions as well as our margin for managing your administration. Feel free to use our contractor calculator at the top of the page to calculate your take-home pay.
Your net payment is the amount you will have paid into your bank account after all deductions are made from the invoice payment. You can use our contractor calculator if you want to determine your net payment based on your service rate.
How much you quote is an agreement between you and your client, but keep in mind when stating your service rate to include employers costs also as theses will be deducted from the total invoice value. The remaining part is your net payment. Use our contractor calculator to figure out your take-home pay.
Create your account today
Get rid of the boring aspects of being an entrepreneur and create your Cool Company account today. It’s completely free of charge and we will help you with all administration, bookkeeping and payment of taxes.