How to calculate your future or contract salary
Predicting future salary means compounding realistic annual increases, not adding them linearly. For contracting, convert a day rate into an annual figure using billable days only, then subtract the costs an employer would otherwise absorb.
The rule
Future salary = current salary × (1 + annual growth)^years · Contract equivalent = day rate × billable days − employer costs
Do it automatically — Salary predictor & contract calculatorStep by step
- 1Pick a realistic annual growth rate: inflation plus a merit increase, with step-ups for promotions.
- 2Compound it year by year rather than adding a flat amount.
- 3For contracting, estimate billable days after holiday, sickness and bench time.
- 4Deduct pension, insurance, accountancy and unpaid leave to compare like for like against permanent pay.
What trips people up
- • Contract day rates look far higher until you price in 8–10 unpaid weeks a year.
- • Permanent packages include pension, sick pay and notice protection that day rates do not.
Common questions
How many billable days should I assume?
Between 220 and 230 is realistic for a well-utilised contractor.
What growth rate is sensible?
2–4% for steady roles, higher only if you expect promotions or a market move.
Skip the maths
Forecast pay 1–10 years out and see whether a day rate beats permanent take-home.
Open the project salary + contract vs perm tool