IR35 Tax Calculator - Umbrella vs Limited Company [2026/27]
Use our IR35 tax calculator to compare your estimated take-home pay 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.
Compare Inside vs Outside IR35
| 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 |
Umbrella Company
| Gross Income | £0 |
| 1. Umbrella Deductions | |
| Umbrella Margin | £0 |
| Pension Contribution | £0 |
| Employer NI | £0 |
| Apprenticeship Levy | £0 |
| 2. Taxable Income | £0 |
| 5. Personal Taxes | |
| Income Tax | £0 |
| Employee NI | £0 |
| Net Take Home | £0 |
Limited Company
| Contract Revenue (excl. VAT) | £0 |
| 1. VAT & Revenue Adjustments | |
| VAT on Invoices | £0 |
| VAT paid to HMRC | £0 |
| Net Company Revenue | £0 |
| 2. Company Costs | |
| Pension Contribution | £0 |
| Director Salary | £0 |
| Employer NI on Salary | £0 |
| Business Expenses | £0 |
| Total Company Costs | £0 |
| 3. Profit Before Tax | £0 |
| 4. Company Taxes | |
| Corporation Tax | £0 |
| Profit Available for Dividends | £0 |
| 5. Dividend Allocation | |
| Dividend Share (%) | 0% |
| Dividends Paid | £0 |
| Retained in Company | £0 |
| 6. Personal Income | |
| Salary | £0 |
| Dividends | £0 |
| Total Personal Income | £0 |
| 7. Personal Taxes | |
| Dividend Tax | £0 |
| Income Tax on Salary | £0 |
| Employee NI (on salary) | £0 |
| Net Take Home Pay | £0 |
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Calculation Assumptions (2026/27 Tax Year)
1. General Tax: Uses a 1257L tax code (Personal Allowance £12,570), tapered above £100,000. Applies English and Welsh tax bands and assumes this is your sole source of income (excluding Student Loans).
2. Inside IR35 (Umbrella): The entered rate is treated as the gross assignment rate. Employer NI (15%) and the Apprenticeship Levy (0.5%) are deducted before gross pay. Holiday pay is assumed rolled up.
3. Outside IR35 (Limited): Corporation Tax is calculated at 19%-25% with Marginal Relief applied automatically. Dividends utilise the £500 allowance, with the remainder taxed at standard dividend bands.
4. Expenses & VAT: Expenses are assumed to be "wholly and exclusively" for business and offset against Corporation Tax. All calculations are based on net revenue, exclusive of VAT.
What this IR35 calculator includes
The calculator provides a detailed breakdown based on the latest 2026/27 UK tax year rates and thresholds. It includes:
- Inside IR35 umbrella company calculations
- Outside IR35 limited company calculations
- Employer and employee National Insurance contributions
- Corporation Tax calculations with marginal relief
- Dividend tax calculations
- Pension contribution adjustments
- Business expense deductions
- Annual and monthly take-home estimates
- Visual comparison charts and detailed financial breakdowns
Inside IR35 umbrella company calculations
When working inside IR35 through an umbrella company, your contract income is treated similarly to employment income. Before you receive your salary, deductions such as Employer National Insurance, Apprenticeship Levy and umbrella margin fees are applied. Income Tax and Employee National Insurance are then deducted through PAYE.
This calculator estimates those deductions and shows your projected net take-home pay based on your chosen day rate or hourly rate, working weeks and pension contributions.
Outside IR35 limited company calculations
Contractors operating outside IR35 through a limited company are usually able to extract income more tax-efficiently using a combination of salary and dividends. The calculator estimates company revenue, allowable business expenses, corporation tax and dividend tax to provide a realistic projection of your overall personal income.
You can also adjust director salary levels, pension contributions, expenses and dividend allocation percentages to model different contractor scenarios.
Who this calculator is useful for
- IT contractors comparing inside and outside IR35 contracts
- Freelancers assessing umbrella company take-home pay
- Limited company contractors reviewing tax efficiency
- Contractors negotiating day rates after an IR35 determination
- Recruitment consultants discussing contractor pay models
- Professionals considering whether to move to an umbrella company
Understand the impact of IR35 on your take-home pay
A contract being classified inside IR35 can significantly reduce net earnings compared to operating outside IR35 through a limited company. However, the actual difference depends on several factors including your contract rate, pension contributions, business expenses and salary strategy.
This calculator helps simplify those comparisons by presenting the figures in a clear and easy-to-understand format, allowing you to make more informed decisions before accepting a contract or changing working arrangements.
Important information
This calculator is intended for guidance purposes only and does not constitute financial, tax or legal advice. While we regularly review and update the calculations using current UK tax rules and contractor scenarios, actual figures may vary depending on your personal circumstances and any future tax changes.
For tailored advice relating to IR35, umbrella companies, limited companies or contractor tax planning, you should speak with a qualified accountant or professional adviser.
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.