Use our free IR35 tax and take-home pay calculator to compare your earnings when working inside IR35 through an umbrella company versus outside IR35 through a limited company. Enter your contract rate, working pattern, pension contributions and expenses to see a side-by-side breakdown of taxes, deductions and net income under both contractor arrangements.
Watch our step-by-step video guide to learn how to enter your contract details, compare both scenarios and review the financial breakdown.
| Summary | Umbrella | Limited |
|---|---|---|
| Taxable Income | £0 | £0 |
| Personal Taxes | £0 | £0 |
| Annual Allowance | £0 | £0 |
| Annual Take Home Pay | £0 | £0 |
| Monthly Take Home Pay | £0 | £0 |
| Gross Income | £0 |
| Umbrella Deductions | |
| Umbrella Margin | £0 |
| Pension Contribution | £0 |
| Employer NI (15%) | £0 |
| Apprenticeship Levy (0.5%) | £0 |
| Taxable Income | £0 |
| 5. Personal Taxes | |
| Income Tax | £0 |
| Employee NI | £0 |
| Net Take Home | £0 |
| Contract Revenue (excl. VAT) | £0 |
| VAT & Revenue Adjustments | |
| VAT on Invoices | £0 |
| VAT paid to HMRC | £0 |
| Net Company Revenue | £0 |
| Company Costs | |
| Pension Contribution | £0 |
| Director Salary | £0 |
| Employer NI on Salary | £0 |
| Business Expenses | £0 |
| Profit Before Tax | £0 |
| Company Taxes | |
| Corporation Tax | £0 |
| Profit Available for Dividends | £0 |
| Dividend Allocation | |
| Dividend Share (%) | 0% |
| Dividends Paid | £0 |
| Retained in Company | £0 |
| Personal Income | |
| Salary | £0 |
| Dividends | £0 |
| Total Personal Income | £0 |
| Personal Taxes | |
| Dividend Tax | £0 |
| Income Tax on Salary | £0 |
| Employee NI (on salary) | £0 |
| Net Take Home Pay | £0 |
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Note: We regularly review and refine this calculator to keep it aligned with current UK tax rules and real-world contractor scenarios. If you have any feedback, spot something that could be improved, or would like to suggest an enhancement, please feel free to get in touch with us.
Our IR35 calculator helps UK contractors compare the financial difference between working inside IR35 through an umbrella company and working outside IR35 through a limited company.
Whether you are reviewing a new contract offer, deciding between PAYE umbrella employment and limited company contracting, or assessing the impact of an IR35 determination, this tool gives you a clearer picture of your potential earnings.
The calculator uses the latest 2026/27 UK tax year rates and thresholds to provide realistic income estimates for contractors. It automatically calculates:
It can also help contractors understand how much an inside IR35 role may reduce take-home pay compared to a genuine outside IR35 contract.
Contractors working inside IR35 are typically taxed similarly to employees. When operating through an umbrella company, deductions such as umbrella margin fees, Employer National Insurance and PAYE taxes are applied before your final net salary is calculated.
This calculator estimates those deductions to help you understand your likely take-home pay based on your contract rate, working weeks and pension contributions.
Contractors working outside IR35 through a limited company often have greater flexibility when extracting income through salary and dividends. The calculator estimates company revenue, business costs, Corporation Tax and dividend tax to provide a realistic breakdown of your projected net income.
You can also adjust director salary levels, pension contributions, dividend allocation percentages and expenses to model different contractor income strategies.
The difference can vary significantly depending on your contract rate, pension contributions, expenses and salary structure. In many cases, contractors working outside IR35 through a limited company retain noticeably more income due to dividend taxation and business expense reliefs.
However, the exact difference depends on your personal circumstances and the way your company income is structured.
Umbrella companies process income through PAYE, meaning Income Tax and National Insurance are deducted similarly to employment income. Employer National Insurance, Apprenticeship Levy and umbrella margin fees are also typically deducted from the assignment rate before net salary is paid.
This usually results in lower take-home pay compared to a genuine outside IR35 limited company arrangement.
Expense claims are far more restricted inside IR35. Most ordinary commuting and subsistence expenses are not allowable when working through an umbrella company under supervision, direction or control rules.
Outside IR35 limited company contractors generally have greater flexibility to offset legitimate business expenses against company profits.
Under most umbrella company arrangements, the advertised contract rate is the total assignment rate paid by the agency or client. Employer National Insurance and Apprenticeship Levy are commonly deducted from that amount before your taxable salary is calculated.
This is one of the main reasons take-home pay inside IR35 is often lower than contractors initially expect.
Yes. The calculator supports both daily rate and hourly rate contractor engagements. You can switch between calculation modes depending on how your contract is structured.
That depends largely on your IR35 status, contract terms, risk profile and preferred working arrangement. Outside IR35 limited company contracting is often more tax-efficient, but umbrella companies may offer simpler administration and reduced compliance responsibilities.
Contractors should consider both financial and practical factors before deciding which structure is most suitable.
Disclaimer: This calculator is intended for guidance only and does not constitute legal, financial, or tax advice. Actual deductions may vary depending on your individual circumstances. For advice tailored to your circumstances, please consult a qualified accountant or tax adviser.