IR35 Calculator 2026/27
Enter your day rate to see what you keep inside IR35 through an umbrella company and outside IR35 through your own limited company, line by line.
| Inside (umbrella) | Outside (own Ltd) | |
|---|---|---|
| Contract income | £110,000 | £110,000 |
| Umbrella margin or expenses | £1,300 | £0 |
| Employer NI and levy | £13,938 | £1,136 |
| Corporation tax | £0 | £21,768 |
| Income Tax | £25,337 | £0 |
| Employee NI | £3,906 | £0 |
| Dividend tax | £0 | £17,164 |
| Take-home | £65,519 | £69,932 |
| Share of contract income | 60% | 64% |
- Inside IR35: the umbrella pays employer NI (15% above £5,000) and the 0.5% apprenticeship levy out of the assignment rate, then runs PAYE on what is left. This is the usual market practice, but check your contract.
- Outside IR35: one director, £12,570 salary, all profit after corporation tax paid as dividends.
- Pension contributions are not included. They reduce tax on both routes.
What IR35 changes
Inside IR35 you are taxed like an employee. Through an umbrella the assignment rate also has to cover employer NI at 15% and usually the 0.5% apprenticeship levy, before your own Income Tax and NI. Outside IR35 your company pays you a small salary and dividends, taxed at lower rates. At £500 a day for 220 days, outside comes to £69,932 against £65,519 inside.
Take-home by day rate (220 days)
Inside means through an umbrella company, outside means through your own limited company.
| Day rate | Inside | Outside | Gap |
|---|---|---|---|
| £300 | £43,424 | £49,154 | £5,729 |
| £400 | £54,472 | £59,543 | £5,071 |
| £500 | £65,519 | £69,932 | £4,413 |
| £600 | £73,805 | £79,586 | £5,781 |
| £750 | £87,248 | £90,163 | £2,915 |
Assumes an umbrella margin of £25 a week, no business expenses outside IR35, England, and no pension contributions. Full breakdowns: £300 a day, £400 a day, £500 a day, £600 a day, £750 a day, £1000 a day.
Who decides your status
For a medium or large client, the client decides and should give you a status determination statement with its reasons. For a small private client, your own company decides. From 6 April 2026 the agency, or the client if there is no agency, is liable for unpaid PAYE by an umbrella company, which makes compliant umbrellas more important than ever.
Frequently asked questions
Why is inside IR35 so much lower?
Because the employer NI of 15% comes out of your assignment rate, and your pay is then taxed at employee rates up to 45% plus NI, while outside IR35 dividends are taxed at 10.75% to 39.35% after corporation tax.
Can I put more into a pension inside IR35?
Yes. Salary sacrifice through the umbrella cuts Income Tax and employee NI, and usually the employer NI taken from your rate too. The calculator leaves pensions out, so both routes are compared like for like.
What about expenses?
Outside IR35 your company can deduct genuine business expenses, which you can enter in the calculator. Inside IR35 you are paid as an employee, so ask your umbrella which expenses, if any, it can reimburse.
Sources: ITEPA 2003 Part 2 Chapters 8, 10 and 11, gov.uk Rates and thresholds for employers 2026 to 2027, Finance Act 2026. The umbrella cost structure is common market practice, not a statutory rule. General information, not tax advice.