IR35 calculator 2026/27
What does IR35 status actually cost you? Enter your rate to compare your take-home inside IR35 (umbrella) against outside IR35 (your own company), on the same contract.
England, Wales & NI, 2026/27. Like-for-like: £12,570 salary, £25/wk umbrella margin, no expenses.
On £110,000 a year
2026/27Inside IR35
umbrella / PAYE
£65,519
keep 60%
Outside IR35
limited company
£69,932
keep 64%
Outside IR35 keeps
more a year, same contract
£4,413
That is £368 a month. Status is decided by how you work, not by choice.
Verified · 2026/2721 June 2026
How this was calculated
On the same annual contract value, we model inside IR35 through an umbrella (margin, employer National Insurance, Apprenticeship Levy, then PAYE Income Tax and employee NI) and outside IR35 through your own limited company (a £12,570 director’s salary, employer NI, Corporation Tax with Marginal Relief, then dividends and dividend tax) for 2026/27. The difference is what IR35 status is worth. Standard assumptions, no expenses; every rate traced to a dated gov.uk source.
The full method and every source is on our methodology page.
Built & maintained by the Pay Packet team · methodology sourced from HMRC · last reviewed 21 June 2026. About our figures →
What IR35 status changes
IR35 asks a simple question with a complicated answer: if you stripped away your limited company, would this contract look like employment? If yes, it is inside IR35 and taxed like a job — typically through an umbrella company, carrying employer National Insurance and full PAYE. If no, it is outside IR35, and you can trade through your own company, paying Corporation Tax and dividends.
The take-home gap above is the price of that status. It has narrowed — employer NI rose to 15% in April 2025 and dividend rates rose 2 points in April 2026 — but outside IR35 is usually still ahead, before any expenses or pension. To weigh the umbrella against your own company once you are outside, see umbrella vs limited; for the basics, read IR35 explained.
IR35 questions
- What does inside vs outside IR35 mean?
- IR35 decides whether a contract is really employment in disguise. Inside IR35, you are taxed broadly like an employee — usually through an umbrella, on PAYE. Outside IR35, you are genuinely in business and can work through your own limited company, paying Corporation Tax and dividends, which is normally more tax-efficient.
- Can I choose to be outside IR35?
- No. Status depends on how you actually work — control, substitution, mutuality of obligation — and for medium and large clients the client makes the determination. You cannot simply opt for the better-paying side; you have to genuinely meet the outside-IR35 tests.
- Why is outside IR35 worth more?
- Outside IR35, profit is taxed through Corporation Tax (19–25%) and you draw dividends, avoiding employer National Insurance and reducing employee NI. Inside IR35, the assignment carries employer NI, the Apprenticeship Levy and full PAYE. The gap has narrowed since employer NI rose to 15% and dividend rates rose, but outside is usually still ahead.
- Does this include expenses or a pension?
- No — it uses standard assumptions (a £12,570 director’s salary, no expenses, no employer pension) so the two sides compare like for like. Legitimate company expenses and pension contributions can improve the outside-IR35 figure further; an accountant can model your own position.
Guidance for 2026/27, not tax, legal or financial advice — and not an IR35 status determination. Figures use standard assumptions; expenses, pension and your actual status will change them. Confirm your status and figures with a qualified adviser and gov.uk/HMRC (CEST).