IR35 take-home calculator: umbrella vs limited company
Enter your day rate to compare estimated 2026/27 take-home pay inside IR35 (umbrella company) and outside IR35 (your own limited company).
Estimated take-home pay
Outside IR35 you could take home about £3,947 more per year (£329 per month) than inside IR35 through an umbrella company.
| Measure | Inside IR35 (umbrella) | Outside IR35 (Ltd) |
|---|---|---|
| Gross pay or income drawn, per year | £103,420 | £93,123 |
| Income tax (including dividend tax), per year | £29,484 | £19,319 |
| Employee National Insurance, per year | £4,079 | £0 |
| Umbrella margin, employer NIC and levy (inside) or accountancy, employer NIC and corporation tax (outside), per year (estimate) | £16,580 | £26,877 |
| Business expenses, per year | £0 | £0 |
| Net take-home, per year | £69,857 | £73,804 |
| Net take-home, per month | £5,821 | £6,150 |
Expenses are not tax-relieved inside IR35, so they reduce your take-home without saving tax. Outside IR35 they are deducted from company profit before corporation tax.
From 6 April 2026 new umbrella company rules make recruitment agencies, or the end client, jointly liable for unpaid PAYE, which affects which umbrellas are used. See the gov.uk guidance on umbrella company PAYE rules. Not sure of your status? Use HMRC's Check Employment Status for Tax (CEST) tool.
This calculator gives estimates for illustration only, based on 2026/27 HMRC rates for England, Wales and Northern Ireland, and is not tax, legal or financial advice. Your actual take-home pay and IR35 status depend on your circumstances, so check with a qualified accountant and HMRC's CEST tool before making decisions.
How this calculator works
We annualise your income (day rate times days per month times 12) and run it through two routes using 2026/27 rates from gov.uk income tax rates and rates and thresholds for employers.
Inside IR35, an umbrella company deducts its margin, then employer National Insurance (15% above £5,000) and the 0.5% apprenticeship levy from your income. The remainder is your gross salary, which is charged income tax and employee National Insurance (8% to £50,270, then 2%). The personal allowance is reduced by £1 for every £2 of income above £100,000.
Outside IR35, your company pays you a director salary, covers accountancy and expenses, then pays corporation tax at 19% to 25% with marginal relief between £50,000 and £250,000. The profit left is paid as dividends, taxed after the £500 allowance at dividend rates of 10.75%, 35.75% and 39.35%. The Employment Allowance is not available to a single-director company.
Read HMRC's guide to understanding off-payroll working (IR35) to see how status is decided. Umbrella margin and accountancy fees are our estimates, so replace them with your own quotes. Student loans, pensions, benefits and other income are not included.
Treat the answer as a guide to the size of the gap, not a quote. Results are rounded to the nearest pound, assume you work the same days all year with no unpaid holiday adjustments, and use the same day rate for both routes. A limited company also carries extra duties, including annual accounts, a confirmation statement and a self-assessment return, which is why we include accountancy fees by default.
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Frequently asked questions
What is IR35?
IR35, also called the off-payroll working rules, stops people who would be employees if they worked directly for a client from paying less tax by working through their own company. If your contract is inside IR35, tax and National Insurance are due as if you were employed.
What is the difference between inside and outside IR35?
Inside IR35 you are treated as an employee for tax, so you are paid through an umbrella company or the client's payroll and receive a salary after income tax, employee National Insurance and employer costs. Outside IR35 your limited company keeps the profit, pays corporation tax and can pay you a small salary plus dividends.
What is the umbrella company margin?
The margin is the weekly fee an umbrella company charges for running your payroll. This calculator assumes £25 per week as an estimate, and you can change it under advanced options. Fees vary, so check your own agreement.
How is the limited company take-home worked out?
We take your annual income, subtract expenses, accountancy fees, your director salary and the employer National Insurance on that salary, then apply corporation tax with marginal relief. What is left is paid as dividends, taxed after the £500 dividend allowance at 10.75%, 35.75% or 39.35%.
Does it include student loan repayments or pension contributions?
No. Student loan repayments, pension contributions, benefits in kind, other income and the Employment Allowance are not included, so your real figures may be lower or higher.
Is this tax advice?
No. It is an illustration based on published 2026/27 rates. Your IR35 status depends on the facts of each engagement, so use the CEST tool and speak to a qualified accountant before making decisions.