IR35 Calculator
Enter your day rate to compare annual take-home pay inside vs outside IR35 — umbrella PAYE against your own limited company.
Based on 2025/26 rates (England, Wales & NI).
Outside IR35 breakdown
- Company turnover
- £110,000
- Director's salary
- −£12,570
- Employer's NI
- −£1,135
- Taxable profit
- £96,295
- Corporation tax
- −£21,768
- Dividends available
- £74,526
- Dividend tax
- −£15,684
- Net take-home
- £71,413
Inside IR35 breakdown
- Assignment income
- £110,000
- Employer's NI
- −£13,633
- Apprenticeship levy
- −£479
- Gross salary
- £95,887
- Income tax (PAYE)
- −£25,787
- Employee's NI
- −£3,928
- Net take-home
- £66,172
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). 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. 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. 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 your contract day rate and the number of billable days you expect to work in the year.
- Adjust the assumptions if you need to — director's salary, business expenses and umbrella margin.
- Read off the annual and monthly take-home pay for inside IR35 (umbrella) and outside IR35 (limited company).
- 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 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.
- 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 and to the director's salary outside IR35.
- 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. 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.