IR35 Tax Calculator 2026/27

Enter your contract rate and working pattern. The calculator models two routes: outside IR35 (a small director salary plus dividends from your own limited company, after corporation tax) and inside IR35 (the same fee taxed as employment income, with employer NIC coming out of it), then shows your net take-home for each.

Both sides start from the same money — your annual contract value excluding VAT — so the gap you see is tax and NIC, not a difference in what the client pays.

You're inside IR35 if HMRC would treat you as a "deemed employee". The main tests are client control, the right to send a substitute, and mutuality of obligation — judged on your working practices, not just the written contract.

Since April 2021 medium and large private sector clients decide your status and issue a Status Determination Statement; you have 45 days to use the client-led disagreement process. A client stays small — leaving responsibility with your own company — until it exceeds two of three limits (£10.2m turnover, £5.1m balance sheet total, 50 employees) for two consecutive years. The Companies Act uplift to £15m / £7.5m cannot affect off-payroll status before 2027/28 at the earliest.

Both. The switch at the top of the tool runs 2026/27 (the default) or 2025/26. From 6 April 2026 the dividend ordinary rate rose from 8.75% to 10.75% and the upper rate from 33.75% to 35.75%. The additional rate did not move: it is still 39.35%.

Because only the dividend rates changed, switching year moves the outside-IR35 figure and leaves the inside-IR35 figure identical — income tax bands, the £12,570 personal allowance, employee NIC at 8% then 2%, employer NIC at 15% and corporation tax are all the same in both years. The impact panel shows the annual cost.

£12,570 usually wins. The employer NIC secondary threshold is £5,000, so £5,000 is the largest salary that attracts no employer NIC at all. But at £12,570 you use the whole personal allowance, and the extra £7,570 costs only 15% employer NIC — £1,135.50 — which is itself deductible for corporation tax. On the default figures here the £12,570 salary is about £750 a year better.

Tick Optimise salary and the calculator runs both and keeps the higher take-home. £9,100 is no longer a meaningful staging post: that was the secondary threshold before April 2025.

Not under the off-payroll rules. Where the client is public sector, or medium or large private sector, the fee-payer works out a deemed direct payment under Chapter 10: the chain payment, less any amounts in respect of VAT, less the direct cost of materials, less any expenses that would have been deductible employment expenses — then PAYE and NICs are operated on the balance. There is no 5% allowance in Chapter 10.

The 5% deduction survives only in Chapter 8, where the client is small or wholly overseas and your own company works out the deemed employment payment. That is why the inside-IR35 column here gives no relief for your company's running costs.

If you're outside IR35, a limited company typically gives higher take-home through a small salary plus dividends. If you're inside IR35, an umbrella may be simpler since you're taxed as an employee anyway — but weigh the umbrella's margin, and remember employer NIC and holiday pay come out of the assignment rate, not on top of it.

From 6 April 2026 the agency closest to the client — or the client itself where that agency is connected or not UK resident — is jointly and severally liable for PAYE an umbrella fails to account for. The umbrella still operates PAYE, and the change makes no difference to a worker's take-home.

No. This calculator provides estimates for illustration purposes only. Always consult a qualified accountant for advice on your specific situation.

IR35 (off-payroll working) decides whether an engagement is employment-like for tax purposes. If you are inside IR35, most of the contract income is treated as employment income through PAYE with employee National Insurance. If you are outside IR35, you typically take a small director salary and distribute profits as dividends after corporation tax. The key factors are control, substitution and mutuality of obligation, plus working practices versus the written contract.

This calculator shows take-home pay, dividend tax, corporation tax and PAYE side by side on 2026/27 rules: personal allowance £12,570 (tapered £1 for every £2 of adjusted net income over £100,000, nil at £125,140), a £37,700 basic-rate limit — £50,270 in gross-salary terms — 45% above £125,140 of taxable income, a £500 dividend allowance charged at the nil rate, corporation tax at 19% on profits to £50,000 and 25% over £250,000 with marginal relief between the two (26.5% on that slice), employee NIC at 8% from £12,570 then 2% above £50,270, and employer NIC at 15% above the £5,000 secondary threshold. Use the pension options to test employer versus your own contributions.

Review status at onboarding, when your statement of work changes, on renewal, or if working practices shift — client control, deliverables, location. Keep evidence of substitution rights, project-based deliverables and financial risk. Clear documentation supports an outside IR35 position, and you have 45 days to challenge a determination you disagree with.

Use this calculator alongside your contract review, the client's status determination statement and professional advice.