KiQiCulators

Should I leave my job? Employed vs self-employed vs limited company

Compare your job with working as a sole trader (with or without CIS) or through your own limited company, and see the day rate you need to earn the same.

🇬🇧 For UK taxpayers onlyTax yearI live in

Your job now

I know my

Salary before tax a year (from your P60 or contract)

Overtime and bonus a year, if any (before tax, on top of the amount above)

I have a workplace pension

Your workplace pension %

Employer pension %

How your workplace pension is paid Pension % worked out on

Paid holiday days

Sick days to allow

28 days is the legal minimum for a full-time job, including bank holidays. 5 sick days is one week.

Working for yourself

I will charge

Day rate (labour)

Days worked a year

Leave out materials: you buy them and charge them on. 227 days is 260 weekdays less 28 holiday days and a week off sick.

Running costs a year

Business miles a year

Phone and internet

Tools and equipment

Materials not charged on

Business insurance

Trade body, tickets and training

Business bank fees

Workwear and safety gear

Other costs

Mileage is worked out at 55p a mile for the first 10,000 (HMRC rate from 6 April 2026), then 25p. Through a Ltd company, the company pays you this tax-free.

Accountant, sole trader

Accountant, Ltd company

I use a room at home for the business (office, paperwork, storage)

Bedrooms

Rent a year (if renting)

Council tax a year

Gas and electricity a year

Water a year

Home insurance a year

Other home bills a year

Leave out mortgage repayments. One room's share = the bills divided by the bedrooms plus one living room.

I also have rental income I also have savings interest You or your partner claim Child Benefit Will the work be under CIS (construction)?

CIS taken off by contractors

Will you pay into a pension after you leave?

Ltd company: how much do you take out as dividends?

Ltd company: add a partner or second employee to the payroll

Is it worth leaving?

Take-home a year and the day rate you need

How each one is worked out

Cash flow: money in your bank

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Two directors

Two directors in one company, such as a couple: compare small salaries plus dividends with bigger salaries, and see the money left for the family and the total tax paid.

Sole trader or Ltd?

The same work two ways: sole trader against your own Ltd company, with running costs, use of home, CIS, rent and savings, the total tax each way and the point where a company starts to pay.

Payslip and salary

See what you take home after income tax, National Insurance, student loan and pension. Compare two salaries side by side.

P60 and tax refund

Put in the figures from your P60 or last payslip and see if HMRC owes you a refund or you still owe tax, with Gift Aid, mileage, uniform and work costs added in.

Self-employed

Your income tax, Class 4 National Insurance and the dates to pay HMRC, with payments on account worked out for you.

CIS

Contractors take 20% (or 30%) off your labour. See your real tax bill and whether HMRC owes you a refund.

Company director

Work out the best mix of salary and dividends for 2026/27, with corporation tax, dividend tax and the dates to pay.

Compare

Put the same money through three ways of working and see which leaves you the most.

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How it is worked out

Your job: income tax and National Insurance on your salary, plus the pension your employer pays.
CIS sole trader: income tax and Class 4 National Insurance on profit after running costs. CIS taken off counts towards the bill.
Limited company: corporation tax, then the best salary and dividends for one director. The company sets CIS taken off against its PAYE bill.
The day rate to match your job is worked out so the total (take-home plus pension) is the same as now.

Questions people ask

What day rate do I need to replace my salary?

Usually much more than your salary divided by 260 days, because you are not paid for holidays or sick days and you pay your own costs. The calculator works it out for you.

Is a limited company better for an electrician on CIS?

It depends on the profit. At higher profits a company can leave you more, but it costs more to run, and dividend tax went up in April 2026.

Can a limited company get CIS deductions back?

Yes. The company takes the CIS deducted from its monthly PAYE and NI bill, and HMRC repays any extra after the year end or on a claim.

Want the real numbers?

These are estimates. Talk to a KiQi accountant about your own situation and the best way to pay yourself.

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Estimates only, for UK taxpayers in England, Wales, Scotland and Northern Ireland, using the rates for the tax year you pick at the top. Nothing you type leaves your browser. Not financial advice.