How this is calculated
At £400 a day you’re at a senior contractor / consultant rate, typical for experienced IT contractors, management consultants, senior developers, and specialist trades. Most senior contractors work through a limited company — this page gives a simple gross-to-take-home view for comparison with an equivalent PAYE salary.
On a gross annual salary of £104,000, HMRC deducts £29,432 in income tax and £4,091 in employee National Insurance for 2026/27 — leaving a take-home of £70,477 per year, or roughly £5,873 per month.
The first £12,570 of income is tax-free (the personal allowance). Earnings between £12,571 and £50,270 are taxed at 20%; between £50,271 and £125,140 at 40%; and above £125,140 at 45%. Employee National Insurance is 8% on earnings between £12,570 and £50,270 and 2% above that.
260 days vs 220 billable days
These figures assume a full 260-day year (5 days × 52 weeks). Most contractors bill closer to 220 days after holidays, sickness, and between-contract gaps. At 220 billable days £88,000 is a more realistic annualised figure, before accounting for business expenses and contractor-specific tax treatment (e.g. operating through a limited company or umbrella).