PayTaxTools
2026/27 rates

Umbrella vs Limited vs Inside IR35 Calculator

Compare take-home pay across all three contracting routes from one set of inputs. IR35 status is a determination made by the client (or, for small clients, by your own company) — not a free choice, so all three routes are shown for comparison even when only some are legally open to your engagement.

Take-home pay across all three routes

Own Ltd (outside IR35)

£66,582.03

Estimated annual take-home

Annual contract income
£110,000.00
Director salary
-£5,000.00
Employer NI on salary
-£0.00
Employer pension contribution
-£5,500.00
Corporation tax
-£22,617.50
Dividends paid
£76,882.50
Income tax on salary
-£0.00
Employee NI on salary
-£0.00
Dividend tax
-£15,300.47
Student loan repayment
-£0.00

Assumes a single-strategy salary/dividend split (salary at the NI Secondary Threshold, rest as dividends), not a full breakpoint-search optimisation across every possible split.

✓ Highest take-home

Own Ltd (inside IR35, deemed payment)

£70,267.40

Estimated annual take-home

Annual assignment income
£110,000.00
Deemed direct payment (s.61Q)
£104,500.00
Income tax
-£30,132.00
Employee NI
-£4,100.60
Student loan repayment
-£0.00

Medium/large client: Chapter 10 (s.61Q ITEPA 2003), fee-payer calculates. No 5% notional expenses allowance applies under the reformed rules.

Umbrella company

£69,849.40

Estimated annual take-home

Annual assignment income
£110,000.00
Umbrella margin
-£1,100.00
Pension contribution
-£5,500.00
Gross taxable pay
£103,400.00
Income tax
-£29,472.00
Employee NI
-£4,078.60
Student loan repayment
-£0.00

Rolled-up holiday pay model (12.07% shown as informational only, already included in the assignment rate). Umbrella margin is a market rate you set, not a regulated figure.

The rate you were quoted, per day.

Jurisdiction
Student loan plan(s)

Percentage of annual gross income, applied consistently across all three routes for comparability.

Per week. Typically £15–£30 for FCSA-accredited providers — not a regulated figure, edit to match your provider's quote.

End client size

From 6 April 2026: turnover ≤£15m, balance sheet ≤£7.5m, employees ≤£50 (meeting 2 of 3) counts as "small" for the off-payroll rules — IR35 status determination then sits with your own company. Note the practical lag: a client's size for a tax year is based on its prior financial year, so many newly-“small” clients won't actually change status for contractors until 2027/28 even though the threshold changes from April 2026.

On: we treat your quoted rate as already net of employer NI and the Apprenticeship Levy — the common case, since most agencies and umbrellas quote rates this way.

This is an estimate

These are estimates on 2026/27 rates, not tax advice. IR35 status is a legal determination, not something this calculator decides for you — confirm your engagement's actual status before relying on any of these figures.

Regime applied to your inside-IR35 figures

Based on the client size you selected, the inside-IR35 route below uses Chapter 10 (s.61Q) — the fee-payer calculates a deemed direct payment; no 5% notional expenses allowance applies.

The 5% allowance is not the important difference. What actually moves the number is who funds employer National Insurance. Under Chapter 10 it is the fee-payer’s own liability, paid on top and never deducted from you. Under Chapter 8 your own company pays it out of the fee, so it comes off your deemed payment (s.54, Step 6). On a £110,000 fee the 5% allowance is worth £5,500 while the employer NI you would bear under Chapter 8 is about £12,978 — roughly 2.4 times larger. That is why the small-client route, despite keeping the 5%, leaves you with less at the same fee.

One caveat worth holding onto: the two regimes rarely come with the same quoted rate. Because a Chapter 10 fee-payer has to fund employer NI on top, inside-IR35 assignments are usually priced lower to keep their total cost flat — so some of this advantage is competed away in the rate itself. Use the employer-costs toggle above to model that.

Own Ltd (outside IR35)

Own Ltd, outside IR35 — breakdown
ItemAmount
Annual contract income£110,000.00
Director salarySet at the £5,000 NI Secondary Threshold-£5,000.00
Employer NI on salaryNil by design — see strategy note-£0.00
Employer pension contribution-£5,500.00
Corporation tax25% rate applied-£22,617.50
Dividends paid£76,882.50
Income tax on salary-£0.00
Employee NI on salary-£0.00
Dividend tax-£15,300.47
Student loan repayment-£0.00
Take-home pay£66,582.03
Show the working: outside-IR35 Ltd
  1. Annual contract income (company revenue)£110,000.00
  2. Director salary (targets Secondary Threshold)£5,000.00
  3. Employer NI on salary£0.00
  4. Employer pension contribution£5,500.00
  5. Profit before Corporation Tax£99,500.00
  6. Corporation Tax (25% with marginal relief)£22,617.50
  7. Dividend pool after tax£76,882.50
  8. Income tax on salary£0.00
  9. Employee NI on salary£0.00
  10. Dividend tax (stacked on top of salary)£15,300.47
  11. Student loan repayment£0.00
  12. Take-home pay£66,582.03

Own Ltd (inside IR35, deemed payment)

Own Ltd, inside IR35 — breakdown
ItemAmount
Annual assignment income£110,000.00
Deemed direct payment (s.61Q)£104,500.00
Income tax-£30,132.00
Employee NI-£4,100.60
Student loan repayment-£0.00
Take-home pay£70,267.40
Show the working: Chapter 10 (s.61Q) deemed payment
  1. Annual assignment income (chain payment before employer costs)£110,000.00
  2. Employer NI / Apprenticeship Levy£0.00Rate already accounts for employer costs — no further deduction applied
  3. Chain payment used for the deemed direct payment£110,000.00
  4. Step 1: Chain payment less VAT£110,000.00
  5. Step 2: less direct cost of materials£110,000.00
  6. Step 3: less deductible expenses£104,500.00
  7. Deemed direct payment£104,500.00
  8. Income tax on deemed direct payment£30,132.00
  9. Employee NI on deemed direct payment£4,100.60
  10. Student loan repayment£0.00
  11. Take-home pay£70,267.40

Umbrella company

Umbrella company — breakdown
ItemAmount
Annual assignment income£110,000.00
Umbrella margin£25.00/week x 44.0 weeks-£1,100.00
Pension contributionCombined employer + employee — shown once to avoid double-counting-£5,500.00
Gross taxable pay£103,400.00
Income tax-£29,472.00
Employee NI-£4,078.60
Student loan repayment-£0.00
Take-home pay£69,849.40
Show the working: umbrella
  1. Annual assignment income (R)£110,000.00
  2. Holiday pay (rolled-up, informational only)£11,847.0612.07% of basic pay, already included in R — not a deduction
  3. Employer NI / Levy£0.00Rate already accounts for employer costs — none deducted here
  4. Umbrella margin£1,100.00
  5. Gross taxable pay (after margin)£108,900.00
  6. Pension contribution (net pay arrangement)£5,500.00
  7. Gross taxable pay for PAYE£103,400.00
  8. Income tax£29,472.00
  9. Employee NI£4,078.60
  10. Student loan repayment£0.00
  11. Take-home pay£69,849.40

VERIFIEDITEPA 2003, s.61Q — calculation of deemed direct paymentLast checked 2026-08-22

VERIFIEDITEPA 2003, s.54 — calculation of deemed employment paymentLast checked 2026-08-22