IR35 Contractor Calculator
Enter your day rate to see what you take home inside IR35 through an umbrella company, and outside IR35 through your own limited company.
Your contract
Inside IR35 (umbrella)
Outside IR35 (limited company)
Assumes a £12,570 director’s salary with all remaining profit paid as dividends, no other income, England, Wales or Northern Ireland, and no pension or student loan.
Inside and outside IR35 at different day rates
Monthly take-home working 220 days a year, with a £25 a week umbrella margin inside IR35 and £1,500 a year company costs outside.
| Day rate | Inside IR35 | Outside IR35 | Difference |
|---|---|---|---|
| £300 a day | £3,627 | £4,037 | £410 |
| £400 a day | £4,548 | £4,903 | £355 |
| £500 a day | £5,468 | £5,769 | £300 |
| £600 a day | £6,156 | £6,594 | £438 |
| £700 a day | £6,858 | £7,156 | £299 |
See every rate from £200 to £1000 a day on our day rate pages.
How inside IR35 pay is worked out
Inside IR35 you are usually paid through an umbrella company, which employs you and runs payroll. At £500 a day for 220 days, the agency pays £110,000. The umbrella keeps its margin of £1,100, then pays employer National Insurance and the apprenticeship levy out of the rest, £13,965 in total. That leaves a gross salary of £94,935, which is taxed like any employee’s: £25,406 Income Tax and £3,909 National Insurance. You take home £65,620 a year.
How outside IR35 pay is worked out
Outside IR35 your limited company keeps the £110,000. After £1,500 of running costs, it pays you a salary of £12,570, which uses your personal allowance, and pays £1,136 employer NI on it. The remaining profit of £94,795 is charged £21,371 Corporation Tax. The company pays out £73,424 in dividends. You pay £16,770 dividend tax at 10.75% and 35.75% after the £500 allowance, leaving £69,224 a year.
Paying out everything is the simplest comparison. In practice many contractors leave some profit in the company or pay into a pension through it, which can lower the tax a lot.
Rates used for 2026/27
| Employer National Insurance | 15% above £5,000 |
| Apprenticeship levy (passed on by umbrellas) | 0.5% |
| Corporation Tax | 19% up to £50,000 profit, 25% over £250,000, marginal relief between |
| Dividend tax | 10.75% basic, 35.75% higher, 39.35% additional |
| Dividend allowance | £500 |
Single-director companies cannot claim the Employment Allowance, so it is not included. This is an estimate for comparing options, not tax advice. Speak to an accountant before you set up a company or sign a contract. For self-employed work without a company, use the self-employed tax calculator.
Sources
Figures are checked against these official sources. Last reviewed 7 November 2026.
Common questions
What is IR35?
IR35, also called the off-payroll working rules, is tax law that checks whether a contractor working through their own company is really working like an employee. If they are, the contract is "inside IR35" and they pay roughly the same tax and National Insurance as an employee.
Who decides if my contract is inside IR35?
For public sector clients and medium or large private sector clients, the client decides and must give you a status determination statement. For small private sector clients, your own limited company decides.
How much do I take home on £500 a day inside IR35?
Working 220 days a year through an umbrella company, about £5,468 a month. Outside IR35 through a limited company it is about £5,769 a month.
Why is inside IR35 take-home so much lower?
Inside IR35 the employer National Insurance (15%) and apprenticeship levy usually come out of your day rate, then you pay Income Tax and employee NI on what is left. Outside IR35 you pay Corporation Tax and lower dividend tax rates instead, with no employee or employer NI on dividends.
Can I claim expenses inside IR35?
Very few. Travel and subsistence to a client site is generally not allowed inside IR35. You can still save tax by paying into a pension through salary sacrifice with your umbrella company.