Organisations can employ staff under two contracts, PAYE and consultancy. Tax and National Insurance (NI) is collected at source for PAYE, but deferred for invoiced consulting fees. The table below outlines their equivalency:

PAYE yearly salary Consulting day rate Yearly net
£30000 £164.647 £22806.17
£42000 £238.321 £28166.17
£55000 £301.57 £34651.93
£70000 £386.41 £43351.93
£90082 £500.00 £54999.49
£115913 £650.00 £69981.39

Attached to this page is an Excel sheet that makes it possible to calculate the equivalency, though it requires some linear interpolation to get to the same yearly net.

This table is based on many assumptions:

  • 2012-13 NI rates
  • The employer does not make any pension contributions, offer any health insurance or other benefits.
  • Consultants are paid for the days they work (unpaid holiday), PAYE employees are paid for all the working days in a year (paid holiday).
dayrates-vs-paye.xls35 KB