Umbrella vs limited company calculator 2026/27
Outside IR35, you can choose. Compare your take-home through an umbrella against your own limited company — accountancy cost included — alongside the admin and risk each brings.
England, Wales & NI, 2026/27. Assumes outside IR35, a £12,570 salary, £25/wk umbrella margin and no other expenses.
On £99,000 a year
2026/27Umbrella
simple, PAYE
£59,995
no accountancy bill
Limited company
after accountancy
£63,237
more admin & filing
Limited company keeps
more a year, after costs
£3,242
That is £270 a month — weigh it against the admin and responsibility of running a company.
Verified · 2026/2721 June 2026
How this was calculated
On the same annual contract, we model an umbrella (margin, employer National Insurance, Apprenticeship Levy, then PAYE) against your own limited company (a £12,570 salary, employer NI, Corporation Tax with Marginal Relief, then dividends and dividend tax), and subtract your accountancy cost from the limited-company figure so the two compare fairly. Standard assumptions, no other expenses; 2026/27 rates traced to dated gov.uk sources. Assumes an outside-IR35 contract, where you have the choice.
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 →
More money, or less hassle?
For an outside-IR35 contract, the take-home maths usually favours your own limited company: profit is taxed through Corporation Tax and dividends, which beats the employer National Insurance and PAYE an umbrella carries — even after an accountant’s fee. But the umbrella buys simplicity: no company to run, no accounts to file, no IR35 record-keeping, and someone else carrying the compliance.
The right answer depends on the size and length of your contracts and how much admin you will tolerate. Short or inside-IR35 work leans umbrella; settled, outside-IR35 work leans limited. If you have not confirmed your status, start with the IR35 calculator, and read how umbrella companies work.
Umbrella vs limited questions
- Umbrella or limited company — which keeps more?
- If your contract is outside IR35, your own limited company almost always keeps more after tax, because profit is taxed through Corporation Tax and dividends rather than employer National Insurance and PAYE. The umbrella wins on simplicity, not on take-home. This tool subtracts a typical accountancy cost so the comparison is fair.
- What does a limited company cost to run?
- Budget roughly £1,200–£1,800 a year for an accountant, plus your own admin time — invoicing, VAT if registered, filing accounts and a confirmation statement, and managing IR35 compliance. An umbrella charges only its weekly margin and handles everything.
- When is an umbrella the better choice?
- For short contracts, inside-IR35 work, first-time contracting, or if you simply do not want the admin and responsibility of running a company. The take-home is lower, but there is no accountancy bill, no filing, and no risk of getting company tax wrong.
- Can I switch between them?
- Yes. Many contractors use an umbrella for inside-IR35 contracts and their own company for outside-IR35 ones, or start with an umbrella and incorporate once they are established. You do not have to commit to one forever.
Guidance for 2026/27, not tax or financial advice. The limited-company figure uses standard assumptions (a £12,570 salary, no expenses beyond accountancy, no associated companies) and assumes an outside-IR35 contract. Your accountant can model your own position; always confirm with gov.uk/HMRC.