IR35 Calculator
Enter your day rate to compare annual take-home pay inside vs outside IR35, and against a permanent salary.
Based on 2025/26 rates (England, Wales & NI).
Drag to explore — inside rate and permanent salary stay matched on take-home.
Outside IR35 breakdown
- Company turnover
- £110,000
- Director's salary
- −£12,570
- Employer's NI
- 9.0%−£1,135
- Taxable profit
- £96,295
- Corporation tax
- 22.6%−£21,768
- Dividends available
- £74,526
- Dividend tax
- 21.0%−£15,684
- Net take-home
- £71,413
Inside IR35 breakdown
- Assignment income
- £123,420
- Employer's NI
- 14.3%−£15,376
- Apprenticeship levy
- 0.5%−£538
- Gross salary
- £107,506
- Income tax (PAYE)
- 29.7%−£31,936
- Employee's NI
- 3.9%−£4,161
- Net take-home
- £71,410
Permanent salary breakdown
- Gross salary
- £107,513
- Employer's NI
- 14.3%−£15,377
- Income tax (PAYE)
- 29.7%−£31,940
- Employee's NI
- 3.9%−£4,161
- Net take-home
- £71,413
Ways to keep more of it
An extra £3,000/year in allowable costs (home-office use, phone/broadband, professional subscriptions, accountancy fees, mileage) would put an extra £1,539 in your pocket instead of it being taxed as profit and dividends.
£36,826 of your dividends are taxed at the higher or additional rate. Paying that into a pension as an employer contribution instead would avoid £18,894 in combined corporation and dividend tax — it goes into your pension pot rather than your bank account, but it's money you'd otherwise lose to tax.
Estimates only, not tax advice. Assumes a single-director company taking all profit as dividends, an umbrella route for inside IR35, and rUK income-tax bands (Scotland differs). The permanent salary figure is a gross annual salary you enter directly (not derived from the day rate); employer's NI is shown for context only and isn't deducted from your take-home. The suggestions above are illustrative — actual benefit depends on your pension annual allowance, other income, and whether expenses are genuinely wholly and exclusively for business use. Speak to an accountant before deciding.
About IR35 Calculator
The IR35 Calculator compares your annual take-home pay inside versus outside IR35 for the same contract day rate, and against a permanent salary you choose. Inside IR35 is modelled as an umbrella/PAYE arrangement, where the assignment rate has to cover employer's National Insurance, the Apprenticeship Levy and the umbrella's margin before income tax and employee's NI are deducted. Outside IR35 is modelled as your own limited company paying a small director's salary, Corporation Tax (including marginal relief) on the remaining profit, and dividends taxed at dividend rates. The permanent salary option takes any gross annual salary you enter and applies standard PAYE income tax and employee's National Insurance, so you can see how contracting compares to being employed. It uses 2025/26 UK tax rates for England, Wales and Northern Ireland, and runs entirely in your browser so none of your figures are uploaded. It is an estimate to help you compare, not a substitute for advice from a qualified accountant.
How to use IR35 Calculator
- Enter any one figure — your outside IR35 day rate, inside IR35 day rate, or an equivalent permanent salary — and the other two update automatically to match the same take-home pay.
- Adjust the assumptions if you need to — director's salary, business expenses and umbrella margin — and the number of billable days you expect to work in the year.
- Read off the annual and monthly take-home pay for inside IR35 (umbrella), outside IR35 (limited company), and the permanent salary.
- Expand each breakdown to see exactly how income tax, National Insurance, Corporation Tax and dividend tax are applied.
Frequently asked questions
- What is the difference between inside and outside IR35?
- Inside IR35 means HMRC treats your contract like employment, so the income is taxed under PAYE — typically through an umbrella company that also bears employer's National Insurance and the Apprenticeship Levy. Outside IR35 means you are a genuine business and can pay yourself through your own limited company with a small salary and dividends, which is usually more tax-efficient.
- How much more do you take home outside IR35?
- It depends on the day rate, but outside IR35 is usually noticeably more tax-efficient because profit is taxed at Corporation Tax and extracted as dividends rather than as fully PAYE-taxed salary. Enter your own day rate above to see the exact annual and monthly difference for your situation.
- How does contracting compare to a permanent salary?
- Enter the gross annual salary of a permanent role in the 'Equivalent salary' field to see its PAYE take-home alongside inside and outside IR35. Contracting day rates usually need to be noticeably higher than an equivalent salary to make up for lost benefits like holiday pay, sick pay, pension contributions and job security, none of which this calculator models.
- How is the inside IR35 take-home calculated?
- Inside IR35 is modelled as an umbrella arrangement. From the assignment rate the calculator removes the umbrella margin, employer's National Insurance (15% above £5,000) and the 0.5% Apprenticeship Levy to find the gross salary, then deducts income tax (PAYE) and employee's National Insurance to give your take-home.
- How is the outside IR35 take-home calculated?
- Outside IR35 is modelled as your own limited company. It pays a director's salary, then Corporation Tax (19%–25% with marginal relief) on the remaining profit. The rest is taken as dividends, taxed at 8.75%, 33.75% or 39.35% after the £500 dividend allowance, on top of any tax and NI on the salary.
- How is the permanent salary take-home calculated?
- The gross annual salary you enter has standard PAYE income tax and employee's National Insurance deducted, the same way it would for any employee. Employer's National Insurance is shown for context but isn't deducted from your take-home, since it's a cost to the employer, not to you.
- Which tax year and rates does it use?
- It uses 2025/26 UK rates for England, Wales and Northern Ireland. The main income-tax thresholds are frozen to April 2028, so the figures also apply to 2026/27. Scottish income-tax bands differ and are not modelled.
- Does it account for the new 15% employer's National Insurance?
- Yes. From 6 April 2025 employer's National Insurance rose to 15% and the secondary threshold dropped to £5,000, which the calculator applies to the umbrella (inside IR35) calculation, the director's salary outside IR35, and the permanent salary comparison.
- Should I include pension contributions?
- This version does not model pension contributions, which can change the comparison significantly — employer pension payments are a tax-efficient way to extract money from a limited company or reduce taxable salary. Treat the result as a salary-and-dividends comparison and speak to an accountant about pension planning.
- Is my data private?
- Yes. Every calculation runs locally in your browser using JavaScript. Your day rate and other figures are never sent to or stored on any server.