2026-27 · IR35 Calculator
IR35 Take-Home Calculator
Compare your net pay inside vs outside IR35. See the real pound-for-pound cost of a status determination before accepting a contract.
For UK contractors operating through a limited company, IR35 is not just a compliance matter — it is a financial determination that can cost you £10,000–£20,000 or more per year on the same day rate. Understanding the numbers before you accept a contract is essential.
IR35 — the off-payroll working rules — determines whether you are genuinely self-employed or, in substance, working as an employee of your client. If HMRC or your client determines you are inside IR35, the fee-payer must deduct income tax and National Insurance before paying you, as if you were on their payroll. You lose the ability to draw income as dividends from that contract, which is the primary mechanism through which limited company contractors achieve tax efficiency.
Outside IR35 means you operate as a genuinely independent business. You take a modest director salary and extract the remainder of your profits as dividends, paying corporation tax on company profits and dividend tax on distributions — typically a significantly lower combined rate than the income tax and NI applied inside IR35.
Since the 2021 reforms, responsibility for determining IR35 status for medium and large clients moved from the contractor to the end client. This means your status is often assessed by the client's HR or legal team rather than by you — making it more important than ever to understand the financial impact of different determinations, and to factor status risk into your day rate negotiations.
Use this calculator to see exactly what your take-home pay looks like under both scenarios on your current day rate and working pattern.
Contract details
Typical: 220 days (5 weeks holiday)
Outside IR35
£67,565
Net take-home per year
Inside IR35
£67,977
Net take-home per year
Outside IR35 puts £412 more in your pocket per year
That is £34/month or 0.0% of revenue
Comparison breakdown
How it works
- 1
Outside IR35
Revenue flows into your company. You pay corporation tax on profits, then take a combination of salary and dividends. Employer NI applies on the salary.
- 2
Inside IR35
Your company receives the fee but it's treated as deemed employment income. Income tax and employee NI are deducted before payment. No dividend option.
- 3
The gap
Outside IR35 is typically more tax-efficient because dividends are taxed at lower rates than salary, and corporation tax is lower than income tax + NI on the same income.
- 4
Other factors
IR35 also affects employment rights, pension planning, and MTD obligations. Day rate negotiation to compensate for inside-IR35 status is common.
HMRC sources
Disclaimer: This is a simplified illustration. Actual inside-IR35 calculations depend on the specific contract, deemed payment calculations, and allowable deductions. Get professional advice before accepting or challenging a status determination.
FAQs
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