UK IR35 Status & Take-Home Pay Calculator (Inside vs Outside IR35)
Calculate and compare your net take-home pay as a UK IT/engineering contractor working Inside IR35 (via PAYE or Umbrella Company with Employer's NI, Apprenticeship Levy, and fee margins) versus Outside IR35 (via Personal Service Company / Ltd Company with optimal salary £12,570, Corporation Tax, and Dividend Tax).
Enter Your Details
Enter your details and click Calculate
Recommended Tools for You
Crunch Accounting
↗Specialist UK contractor accounting packages with full IR35 guidance, PSC setup, and proactive tax planning.
Get Started →PayStream
↗FCSA-accredited top UK umbrella company for compliant inside IR35 payroll with clear fee structures.
Get Started →Qdos Contractor
↗Leading UK IR35 contract review, SDS status determination, and tax investigation insurance for contractors.
Get Started →Tide Business Banking
↗UK digital business account with instant setup, free bank transfers, and seamless Xero/FreeAgent integration.
Get Started →FreeAgent
↗Award-winning UK cloud accounting built for contractors — handles CT600, Self Assessment, VAT returns, and dividend management.
Get Started →Frequently Asked Questions
What is IR35 and how does it affect contractors?
IR35 (the 'Off-Payroll Working Rules') is UK tax legislation designed to prevent contractors from avoiding income tax and National Insurance by operating through a Personal Service Company (PSC). If HMRC determines your contract is 'inside IR35', you are treated as a deemed employee — paying Income Tax and NICs via PAYE just like an employee. If you are 'outside IR35', you run a Ltd company, pay yourself an optimal salary and dividends, resulting in higher net take-home pay.
What is the Corporation Tax rate for a PSC in 2026/27?
Corporation Tax for 2026/27 is 19% on profits up to £50,000, and 25% on profits above £250,000. For profits between £50,000 and £250,000, Marginal Relief applies, creating an effective rate that tapers from 19% to 25%. The optimal director salary for a PSC is £12,570 (equal to the Personal Allowance) as it triggers no Income Tax and no Employee NI, while maintaining State Pension credits.
What is the dividend allowance and dividend tax rates for 2026/27?
The dividend allowance for 2026/27 is £500 — dividends up to this amount are tax-free. Above the allowance, dividend tax rates are 8.75% (Basic Rate band), 33.75% (Higher Rate band), and 39.35% (Additional Rate for income above £125,140).
What are the Employer NI and Apprenticeship Levy rates in 2026/27?
Under inside IR35 (umbrella company), Employer's National Insurance is 13.8% on earnings above the Secondary Threshold (£9,100/year). The Apprenticeship Levy adds a further 0.5% of total gross wage. These employer costs are deducted from your gross assignment fee before paying your employee salary.
Disclaimer: Results are estimates based on standard tax rules for the 2026 tax year and are provided for informational purposes only. Individual circumstances (deductions, credits, specific state/local rules) may significantly affect your actual tax liability. Always consult a qualified tax professional or accountant for advice specific to your situation.