IR35 Calculator: Inside vs Outside
An inside-IR35 determination means you're taxed like an employee. This calculator shows the gap, so you can judge whether a higher inside rate is fair.
Tax year 2026/27 · Estimates, not personal tax advice
Accountant, insurance, kit
Outside IR35
£68,515
£5,710 / month
Inside IR35
£65,809
£5,484 / month
Limited company
| Contract income | £110,000 |
| Corporation Tax | −£20,973 |
| Dividends paid | £72,321 |
| Personal tax | −£16,376 |
| Take-home | £68,515 |
Umbrella / PAYE
| Gross salary | £95,261 |
| Employer NI (from rate) | £13,539 |
| Income Tax + NI | −£29,452 |
| Take-home | £65,809 |
Difference: £2,707 a year. Assumes a £12,570 director's salary, all post-tax profit paid as dividends and no Employment Allowance. Excludes employer pension costs, holiday-pay arrangements and Apprenticeship Levy, which depends on the employer's pay bill and allowance. This comparison does not determine IR35 status; check the umbrella's pay illustration.
Rates and rules used
Tax year 2026/27Default year 2026/27 (6 April to 5 April). 2025/26 and 2024/25 figures are kept for comparison where the calculator offers a year choice.
- Off-payroll working (IR35) rules2026/27GOV.UK: Understanding off-payroll working (IR35) (opens in new tab)
- Income Tax bands, rates and Personal Allowance2026/27GOV.UK: Income Tax rates and allowances (opens in new tab)
- Employee Class 1 National Insurance rates and thresholds2026/27GOV.UK: National Insurance rates and category letters (opens in new tab)
- Dividend Allowance and dividend tax rates2026/27GOV.UK: Tax on dividends (opens in new tab)
- Corporation Tax main rate, small profits rate and marginal relief2026/27GOV.UK: Corporation Tax rates and reliefs (opens in new tab)
Independent site, not affiliated with HMRC. Always check GOV.UK for the latest figures.
How this calculation works
- 01Outside: pay a £12,570 salary, deduct expenses and employer NI, apply Corporation Tax.
- 02Pay remaining profit as dividends and apply personal tax.
- 03Inside: remove the umbrella margin, employer NI and 0.5% levy from the contract income.
- 04Run the remaining gross salary through PAYE.
Real payroll can differ because tax and NI are worked out per pay period, and your tax code may include adjustments HMRC hasn't told you about. See our methodology.
Who decides IR35 status
For medium and large private-sector clients and all public-sector bodies, the client decides and issues a Status Determination Statement. For small clients, your own company decides. This calculator doesn't assess status; use HMRC's CEST tool for that.
Understanding your ir35 calculator result
The result compares two tax treatments for the contract figures entered. It does not determine status; working practices and the contractual relationship decide whether the off-payroll rules apply.
Finding an inside-rate comparison
Scenario: Enter the outside day rate and realistic working days, then test possible inside rates using the same contract length.
How to use the result: Compare net income after employment costs and PAYE. The rate needed to match an outside result varies with expenses, pension arrangements and available company planning.
Details to check before relying on the estimate
- Read the client's Status Determination Statement where one is required.
- Contract wording and actual working practices both matter.
- Do not treat a percentage uplift as a universal break-even rule.
Putting the estimate into perspective
Use the comparison to discuss the financial terms of an offer, not to choose its tax status. A preferred take-home result cannot establish how the engagement should be treated.
Frequently asked questions
What day rate inside IR35 matches my outside rate?
As a rough rule, inside rates often need to be 20–30% higher to deliver similar take-home pay. Try different rates above to find your break-even.
Check it on GOV.UK: Understanding off-payroll working (IR35) (opens GOV.UK in a new tab)
Who decides whether a contract is inside or outside IR35?
The organisation hiring you, or their agency, usually makes the status decision for medium and large clients. The decision must consider the real working relationship, not only the contract wording.
Check it on GOV.UK: Understanding off-payroll working (IR35) (opens GOV.UK in a new tab)
Is this calculator a status decision?
No. It compares the income you might take home under different assumptions. It cannot decide whether IR35 applies, so use HMRC's guidance for that.
Check it on GOV.UK: Understanding off-payroll working (IR35) (opens GOV.UK in a new tab)
Related calculators
- Contractor Tax Calculator — Compare company and umbrella take-home in more detail.
- Self Employed Tax Calculator — Estimate sole-trader profit where that structure is appropriate.
- Corporation Tax Calculator — See the company-level charge in an outside arrangement.
Related guides
- IR35 Explained — What IR35 is, who decides your status, how inside-IR35 contracts are taxed and what it means for your take-home pay.