Umbrella Company Calculator 2026/27
Work out what actually lands in your bank when you are paid through an umbrella company — and see every deduction between the assignment rate and your net pay.
Calculate your take-home pay
The rate invoiced to the agency, excluding VAT
Converts an hourly rate, and tests the wage floor
46 allows for leave and gaps between assignments
Your umbrella
Not regulated and not capped. Commonly quoted at £80–£150 a month — check whether your quote is weekly or monthly
Of qualifying earnings between £6,240 and £50,270. Set 0 if you have opted out
Also of qualifying earnings. Funded out of the assignment rate, before your gross pay is set
Net pay: relief is immediate at your top rate. Relief at source: the contribution leaves taxed pay, the provider adds 20% inside the pension and a higher-rate taxpayer claims the rest through Self Assessment — relief that is not in the take-home figure
Student loan
9% of gross pay above the plan threshold
Limited-company comparison only
Reduce company profit and are reimbursed to you when actually incurred, so they are not take-home on either route
Most one-person consultancies are limited cost businesses at 16.5%, where the scheme is worth close to nothing
| From assignment rate to net pay | Monthly | Yearly |
|---|
National Insurance is really worked out pay period by pay period. This model applies the annual thresholds once, so on a part-year assignment paid weekly or monthly your real NIC will be a little higher than shown. Rolled-up holiday pay is displayed as a slice of gross pay, because that is what it is — it never sits above gross pay the way employer NIC does.
Umbrella versus your own limited company
Same assignment rate, run through a personal service company instead: a £12,570 salary with 15% employer NIC on the part above £5,000, £1,800 a year of accountancy, everything left paid out as dividends, corporation tax at 19% or 25% with marginal relief, and dividends taxed at the April 2026 rates of 10.75% and 35.75%. Nothing is retained in the company and no company pension contribution is made.
The April 2026 umbrella reform, and what it does not do
For payments made on or after 6 April 2026, section 24 of Finance Act 2026 inserted new sections 61Y to 61Z1 into ITEPA 2003 and made the agency closest to the end client jointly and severally liable for the PAYE income tax and Class 1 NIC due on payments to umbrella workers. Where that agency is connected to the client within ITA 2007 s.993, or is not UK-resident, the liability sits with the end client instead. The commencement detail is in SI 2026/388.
What does not change
- The umbrella still operates PAYE. Responsibility for running your payroll was not transferred to the agency or the client. Anyone telling you the agency now operates PAYE for umbrella workers has read the wrong draft.
- Your take-home does not change. Joint and several liability changes who HMRC can pursue when the tax goes unpaid. It does not change a single line of the arithmetic above.
- The margin is still unregulated. There is no statutory cap on what an umbrella can charge, and the Conduct of Employment Agencies Regulations have not yet been extended to umbrella companies — that is expected in 2027 under the Employment Rights Act 2025.
What it does change, in practice
Your agency, or your client, now carries your umbrella's PAYE risk. Expect harder due diligence, shorter preferred-supplier lists, and much less patience for any arrangement promising an unusually high retention — the party that would have to settle the bill is now the one that engaged you.
One honest caveat: we have not found a statutory reasonable-care defence in sections 61Y to 61Z1. The duty and HMRC's recovery power are on the face of the legislation; the absence of a defence is our reading of those sections rather than a rule we can quote at you.
How the calculator works
Every figure below is annual, then divided into the period you have selected. The chain runs in this order, because that is the order the money actually moves in.
- Assignment rate × units worked. What the agency pays your umbrella, excluding VAT. Not your gross pay.
- Less the umbrella's margin. Not regulated, not capped.
- Less any employer pension contribution, which is funded out of the assignment rate and is free of National Insurance.
- Less employer NIC at 15% on gross pay above the £5,000 secondary threshold.
- Less the Apprenticeship Levy at 0.5%, where the umbrella's annual pay bill exceeds £3m. The £15,000 allowance is the umbrella's, spread across its whole pay bill.
- Equals your gross pay. Rolled-up holiday pay at 12.07% is a slice of this figure, not an addition to it. If your umbrella accrues holiday pay instead of rolling it up, your gross is lower in a working week and higher when you take leave; the annual total is the same.
- Less income tax: 20% on taxable pay to £37,700, 40% to £125,140 and 45% above, against a £12,570 personal allowance that is withdrawn by £1 for every £2 of income over £100,000 and is gone at £125,140.
- Less employee NIC: 8% between £12,570 and £50,270, then 2% above.
- Less your own pension contribution on qualifying earnings between £6,240 and £50,270.
- Less student loan repayments at 9% above your plan threshold, plus 6% above £21,000 on a postgraduate loan.
- Equals net take-home.
| Item | 2026/27 | 2025/26 |
|---|---|---|
| Personal allowance | £12,570 | £12,570 |
| Income tax on taxable pay | 20% to £37,700 · 40% to £125,140 · 45% above | Same |
| Personal allowance taper | £1 lost per £2 over £100,000, nil at £125,140 | Same |
| Employee NIC | 8% from £12,570 to £50,270, 2% above | Same |
| Employer NIC | 15% above £5,000 | 15% above £5,000 |
| Apprenticeship Levy | 0.5%, £15,000 allowance, bites above a £3m pay bill | Same |
| Holiday pay accrual | 12.07% | 12.07% |
| Pension qualifying earnings | £6,240 to £50,270 | Same |
| National Living Wage, 21 and over | £12.71 from 1 Apr 2026 | £12.21 |
| Student loan Plan 1 / 2 / 4 / 5 | £26,900 · £29,385 · £33,795 · £25,000 | £26,065 · £28,470 · £32,745 · £25,000 |
| Postgraduate loan | £21,000 at 6% | £21,000 at 6% |
| Dividend rates (limited-company column) | 10.75% · 35.75% · 39.35% | 8.75% · 33.75% · 39.35% |
| Dividend allowance | £500 nil-rate band, uses up basic-rate band | £500 |
| Corporation tax | 19% to £50,000, 25% over £250,000, marginal relief 3/200 between | Same |
| Umbrella margin | Not regulated, no cap | Not regulated, no cap |
| Chain liability for PAYE | Joint and several from 6 Apr 2026 | None |
| Assignment rate | Gross pay (yearly) | Monthly take-home | Retention |
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No. The assignment rate is what the agency pays the umbrella for your work, excluding VAT. The margin, employer NIC at 15% above the £5,000 secondary threshold, any employer pension contribution and the 0.5% Apprenticeship Levy come out of it first. What is left is your gross pay — and your income tax, employee NIC and your own pension come out of that.
It uses 2026/27 rates: personal allowance £12,570, income tax 20% on taxable pay to £37,700, 40% to £125,140 and 45% above, employee NIC 8% from £12,570 to £50,270 and 2% above, employer NIC 15% above £5,000, and the Apprenticeship Levy at 0.5%.
Two deliberate simplifications: it applies the annual thresholds once rather than period by period, so a part-year assignment will show slightly more NIC in practice; and it assumes the pay pattern runs across a single tax year, which is what gives you the full personal allowance.
No. From 6 April 2026 the agency closest to the end client is jointly and severally liable for the PAYE and NIC due on payments to umbrella workers, and the end client takes that place where the agency is connected to it or is not UK-resident. The umbrella still operates PAYE and still produces your payslip.
Joint and several liability changes who HMRC can pursue if the tax goes unpaid. It does not change your deductions. What it does change is how carefully your agency will check your umbrella.
No. Holiday pay accrues at 12.07% under regulation 15B of the Working Time Regulations 1998 and is a component of your gross pay, not an employer cost sitting above it. Rolled up, it is itemised on each payslip; accrued, it is held back and paid when you take leave. Either way the annual total is identical, and it does not count towards the National Minimum Wage test on the hours you work.
Because the assignment rate has to cover the cost of employing you as well as paying you. Run the numbers above and the chain is visible: margin and employment costs first, then income tax, employee NIC and your pension. Anything advertising a retention far above what this calculator shows is not doing different arithmetic — it is doing something else, and since April 2026 the agency or client that engaged you is on the hook for the difference.
Retention is not really a quality measure — it falls as your rate rises, because more of your pay sits in the 40% band. On this calculator's own arithmetic (5 days a week, 46 weeks, £110 a month margin, 5% pension) retention runs at roughly 65% at £250 a day, 60% at £400 and 54% at £600. A lower percentage at a higher rate is arithmetic, not a sign your margin is too high.
Compare margins in pounds, not retention percentages. And remember the pension line is money you keep, just not today.
The margin is not regulated and not capped. Quotes commonly sit in the £80–£150 a month range. View our recommended FCSA-certified umbrella providers → Two things to check: whether the figure is per week or per month, and whether it is taken before or after employment costs — the same headline margin can mean different money.
Usually not. Since April 2016 travel and subsistence relief is denied where the worker is subject to supervision, direction or control by anyone in the chain, which covers most umbrella assignments. Your umbrella can tell you whether any of your costs qualify. That is why the business-costs field on this page only affects the limited-company column.
If the engagement is inside IR35 — or the client has determined that it is — an umbrella is the straightforward route. A limited company is only an option where the engagement is genuinely outside IR35. Use the comparison above rather than a rule of thumb: dividends now cost 10.75% and 35.75% after the April 2026 rise, so the gap is narrower than the figures you may remember.
Make sure your umbrella is compliant.
New Joint & Several Liability rules mean a non-compliant umbrella can leave you or your agency with the tax bill. Compare umbrella companies vetted by ContractorUK.
Compare umbrella companies →Featured firms pay to appear. All specialise in contractors.This calculator provides arithmetic calculations only, on the assumptions stated above. Verify with HMRC guidance on working through an umbrella company, your umbrella's own illustration, or a qualified accountant.