Salary → day rate
Salary to day rate calculator
Your assumptions — 220 days · €5,000 expenses · 5% pension · Medium risk
Salary and bonus are taxed as PAYE; the contractor side is taxed as self-employed with your expenses and pension. Employer pension and benefits are added as pre-tax cost the contract has to fund. Salary ÷ 220 would give €409/day.
What the conversion includes
- Tax on both sides. The salary is taxed as PAYE with the employee credit. The contract is taxed as self-employed income — no PAYE credit, Class S PRSI and the USC surcharge above €100,000.
- The employer’s extras. Employer pension and benefits are pre-tax costs the contract has to fund, so they are added to the billing, not the take-home.
- Your business costs. Accountant, insurance, equipment and training come out of the contract before tax.
- Contractor risk. Gaps between contracts, unpaid sick days and development time. Holidays are handled by billable days.
The break-even rate replaces the package exactly if you bill every planned day. The equivalent day rate adds the risk allowance — on the default Medium setting, the full calculator puts a €80,000 take-home at €665/day break-even and €780/day with risk.
Questions
How do I convert a salary to a day rate in Ireland?
Work out the take-home the salary gives you, then the contract billing that leaves the same take-home after self-employed tax, your expenses and pension. Add what the employer paid on top — pension and benefits — and an allowance for the risks a contract carries, then divide by the days you will bill.
Why not divide my salary by 220?
Because it ignores the costs an employer carries and the days you will not be paid for. On DayRate’s defaults, €96,000 of salary, employer pension and benefits needs about €570/day, against €409/day from salary ÷ 220.
Should bonus and pension be included?
Yes, if you would otherwise receive them. A bonus is taxed as income; an employer pension contribution and benefits like health cover are costs you will fund yourself as a contractor.