IR35 calculator
Outside IR35 you invoice through your own company, pay corporation tax on the profit and dividend tax on what you draw. Inside IR35 or through an umbrella, the whole fee is employment income and employer National Insurance comes out of the assignment rate before you are paid. On typical rates the difference in take-home is around 3% to 5% of what you bill.
Enter a day rate and see both outcomes. The number that surprises most contractors is not either take-home figure — it is how close together they now are.
Inside or outside IR35: take-home comparison
Assumes one contract, no other income, a salary at the personal allowance and everything else drawn as dividends. Inside IR35 and umbrella working are treated the same way: employer National Insurance comes out of the assignment rate. Estimate only.
Why the gap closed
Contractors remember a world where operating outside IR35 was worth a great deal. Two changes ate most of it: dividend rates rose — twice — and employer National Insurance went to 15%, which for an inside engagement comes straight out of the assignment rate.
Worked through on the assumptions above:
| Day rate | Billed | Outside | Inside / umbrella | Difference |
|---|---|---|---|---|
| £400 | £88,000 | £59,543 | £55,318 | £4,225 — 4.8% |
| £500 | £110,000 | £69,932 | £66,414 | £3,518 — 3.2% |
| £750 | £165,000 | £92,677 | £88,176 | £4,501 — 2.7% |
Real money, and worth having. But not the difference between viable and unviable that the phrase "caught by IR35" still implies — and worth knowing before you turn down a contract over its determination.
The comparison people actually get wrong
Not inside against outside — it is an umbrella rate against a limited company rate. The umbrella figure has employer National Insurance still to come out of it, so comparing the two headline numbers overstates the umbrella by roughly 13% before anything else happens. Agencies quoting both should be asked which is which.
Deciding between an inside contract and no contract?
Send us the rate and the determination. We will tell you what each option leaves you with, what a company still gives you beyond tax, and whether it is worth keeping one open — free assessment, and a straight answer if the company is not worth the fees.
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Free assessment first. If there is work to do, you get a fixed quote in writing before anything starts.
What the calculator leaves out
- Other income — a working spouse, rental income, or a second contract all change which band the dividends fall into.
- Money left in the company, which is where a company genuinely wins: profit not drawn is taxed once, not twice.
- Employer pension contributions, deductible for the company and free of National Insurance — often worth more than the whole inside-outside gap.
- The cost of running the company: accounts, a CT600, a confirmation statement, our fees.
- Umbrella margins, holiday pay treatment, and the apprenticeship levy where it applies.
For what the status question actually turns on rather than what it costs, see IR35 explainedand inside or outside.
Questions people ask
How much does an inside IR35 determination actually cost me?
Less than most contractors assume — typically around 3% to 5% of what you bill, on the assumptions this calculator uses. The rise in dividend rates and employer National Insurance at 15% have closed most of the gap that once made status feel decisive.
Why is employer National Insurance deducted from my rate?
Because inside IR35 or through an umbrella, someone has to pay it, and the assignment rate is what it comes from — the agency does not add it on top. That is why an umbrella "rate" and a limited company rate are not comparable figures.
What assumptions does this make?
One contract, no other income, a salary at the personal allowance and everything else drawn as dividends. Change any of those — a working spouse, other income, money left in the company — and the answer moves.
Does it include the 5% expenses allowance?
No. Where it applies, the deemed payment calculation can allow a deduction, but the rules differ depending on who determined the status and under which chapter. Treat this as the shape of the answer, not the return.
Should I just take the umbrella then?
It is a legitimate choice, and simpler. But the comparison is not only tax: a company gives you control over timing, the ability to leave profit in the business, pension contributions from the company, and the option of working for several clients at once.
Can I be inside on one contract and outside on another?
Yes — status is determined contract by contract, not for you as a person. Running one of each at the same time is common and entirely legitimate, provided each determination reflects the actual working arrangement.
Figures are for the tax year shown and change every April. They are general information, not advice — we check the current position for your circumstances before anything is filed.
Reviewed 19 October 2026.
Part of our work on contracting and ir35 — if you want someone to take it off your hands, start with our accountant for contractors page.