Tax Year 2026/27

Your True Contractor Take-Home

See your true take-home across outside IR35, inside IR35, and umbrella — side by side, instantly. Every deduction explained. Every assumption transparent. No email required.

£ / day
5
46
5%
Outside IR35 (Limited Co) £0 £0 / year Best option
Inside IR35 £0 £0 / year
Umbrella Company £0 £0 / year
— Effective deduction rate (best case)
£0 Gross annual income
Rate uplift recommendation
—
Toggle to inside IR35 or umbrella to see what day rate you'd need to match your outside IR35 take-home.

Full Deductions Breakdown

See exactly where every pound goes. Select a scenario below for a line-by-line breakdown of all taxes, NI, and fees deducted from your contract income.

Item Amount
Gross income£0
Employer NI 15%—
Apprenticeship levy 0.5%—
Umbrella margin £25/wk—
Pension contribution 0%—
Income tax 20/40/45%—
Employee NI 8%/2%—
Student loan repayment 9%—
Corporation tax 19-25%—
Dividend tax 8.75/33.75/39.35%—
Net annual take-home£0

How the Calculator Works

This tool compares your net take-home pay across three common UK contracting structures using the latest 2026/27 tax rates.

Step 1

Set Your Contract Details

Enter your day rate, days per week, and working weeks per year. Toggle IR35 status, pension, student loan, and location to match your real situation.

Step 2

Compare Three Scenarios Instantly

See outside IR35 (limited company), inside IR35 (deemed employment), and umbrella company results side by side. All calculations update as you adjust any input.

Step 3

Get Your Rate Uplift Target

If switching from outside to inside IR35, the uplift module shows the exact day rate you need to maintain your current take-home pay — a concrete number for your next rate negotiation.

Worked Example

A senior IT contractor on £650/day, 5 days/week, 46 weeks/year, comparing all three scenarios.

Scenario: Outside IR35 → client wants to move the role inside IR35. What should the contractor negotiate?
MetricOutside IR35Inside IR35Umbrella
Annual gross£149,500£149,500£149,500
Employer NI (15%)—−£21,675−£21,503
Apprenticeship levy (0.5%)—−£748−£742
Umbrella margin——−£1,150
Pension contribution (0%)———
Income tax—−£38,360−£37,923
Employee NI (8%/2%)—−£4,552−£4,533
Corporation tax−£33,769——
Dividend tax−£29,614——
Net annual£86,116£84,165£83,650
Uplift needed to match outside IR35 take-home: ~£670/day (3%) inside IR35; ~£675/day (4%) umbrella. The umbrella uplift is slightly higher because the margin reduces the pool available for salary. Without pension contributions the IR35 gap narrows at higher rates — set a pension contribution (5-10%) in the calculator to see the gap widen significantly. Actual figures will vary based on pension, student loan, and specific tax circumstances.

Frequently Asked Questions

Common questions about IR35, umbrella companies, and contractor tax calculations.

Outside IR35 means HMRC considers you a genuine contractor — you run your own limited company, pay corporation tax on profits, and draw dividends. Inside IR35 means HMRC deems you an employee for tax purposes — you pay income tax and NI like a permanent employee, even though you may not get employee benefits. The difference in take-home pay is typically 20–30%.
A rate uplift is the higher day rate you need when a contract moves from outside IR35 to inside IR35 (or through an umbrella), to compensate for the extra tax, NI, and fees you pay as a deemed employee or umbrella worker. We calculate it by finding the inside IR35 or umbrella day rate that produces the same net annual take-home as your outside IR35 scenario, using your current inputs.
An umbrella company employs you on behalf of the end client. They handle payroll, tax, NI, and pension deductions. The umbrella deducts a margin (typically £20–30/week) for this service. Inside IR35, an umbrella and direct PAYE produce similar outcomes, but umbrellas may offer slightly different pension and expense arrangements.
Plan 1: started university before September 2012 (England/Wales/NI). Plan 2: started between September 2012 and July 2023 (England/Wales). Plan 4: Scottish students who started after 1998. Plan 5: English students who started after August 2023. Each plan has different repayment thresholds and rates. Select the correct one for accurate take-home calculations.
Scotland sets its own income tax bands and rates for non-dividend, non-savings income. The 2026/27 Scottish rates use five bands: Starter (19%), Basic (20%), Intermediate (21%), Higher (42%), and Top (48%). This means Scottish contractors generally pay more income tax than those in England and Wales on the same income.
This calculator uses 2026/27 tax rates and thresholds. It assumes: no other income sources, standard personal allowance (£12,570), standard dividend allowance (£500), and no complex share/asset structures. Limited company calculations assume all profit is drawn as dividends after corporation tax. The tool is for illustration — always consult a qualified accountant for your specific situation.

Methodology & Assumptions

We believe in radical transparency. Here is exactly how every figure is calculated.

Tax Rates Applied

  • Personal allowance: £12,570
  • Basic rate 20%: £12,571–£50,270
  • Higher rate 40%: £50,271–£125,140
  • Additional rate 45%: over £125,140
  • Employee NI: 8% / 2% thresholds
  • Employer NI: 15% above £5,000
  • Corporation tax: 19% (profits under £50k)
  • Dividend tax: 8.75% / 33.75% / 39.35%

Key Assumptions

  • No other employment income or benefits
  • Standard personal allowance (no high-income tapering)
  • Limited company: all post-tax profit drawn as dividends
  • Umbrella margin: £25/week
  • No VAT considerations
  • No capital gains or property income

Employer NI & Apprenticeship Levy

  • Employer NI: 15% on earnings above the secondary threshold (£5,000/year)
  • Apprenticeship levy: 0.5% on total pay bill (most umbrellas pass this on)
  • Inside IR35 and umbrella: employer NI is paid from the contract value
  • Outside IR35: no employer NI — the limited company pays corporation tax instead

Student Loan Repayments

  • Plan 1: 9% above £24,375/year
  • Plan 2: 9% above £27,295/year
  • Plan 4: 9% above £31,395/year
  • Plan 5: 9% above £25,000/year
  • Calculated on gross employment income before pension relief
Tax year 2026/27 rates Last updated: June 2026 Methodology referenced Transparent assumptions HMRC rate-sourced bands

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