IR35 and contractors
IR35 calculator: inside, outside or umbrella
One day rate, three ways of being paid, and the rate each would need to leave you the same.
On £450 a day for 220 days in 2026/27, with £2,000 of company costs, a contractor keeps £63,793 outside IR35 through their own company, £67,977 inside IR35 with the fee-payer deducting PAYE, and £60,186 through an umbrella company charging £20 a week. The gap between the last two is employer National Insurance: inside IR35 the deemed employer pays it on top of the fee, while an umbrella takes £12,085 of it, plus the Apprenticeship Levy and its margin, out of the assignment rate. Turned into break-even rates, matching the outside figure takes £418 a day inside IR35 and £483 a day through an umbrella. With the 2026/27 dividend rates and Corporation Tax, the outside route has lost much of its old lead, so the rate offered for each kind of role matters more than the label.
Outside IR35, your own company
£63,793
| Salary | £12,570 |
| Corporation Tax | £18,323 |
| Dividends paid out | £64,971 |
| Income and dividend tax | £13,749 |
| National Insurance (both sides) | £1,136 |
Inside IR35, paid through your company
£67,977
| Treated as salary | £99,000 |
| Income Tax | £27,032 |
| Employee NI | £3,991 |
| Student loan (Self Assessment) | £0 |
| Employer NI paid on top by the fee-payer | £14,100 |
Through an umbrella company
£60,186
| Assignment income | £99,000 |
| Margin | £920 |
| Employer NI and Levy from your rate | £12,513 |
| Income Tax and employee NI | £25,381 |
| Student loan | £0 |
Outside IR35 assumes the best salary and every pound left after Corporation Tax paid out as dividends; inside IR35 assumes the fee is not cut to cover employer costs. Pension, holiday pay accrual and VAT are left out. Method and limits
Figures checked by Radif Partners · Editorial policy · How we calculate
Six day rates, three routes
The table keeps the same assumptions as the calculator’s defaults: 220 working days, £2,000 of costs run through the company when outside IR35, an umbrella margin of £20 a week for 46 weeks, the Apprenticeship Levy passed on, England, Wales or Northern Ireland rates and no student loan.
| Day rate | Fees for the year | Outside, own company | Inside IR35 | Umbrella | Most left |
|---|---|---|---|---|---|
| £300 | £66,000 | £48,209 | £48,837 | £43,615 | inside |
| £400 | £88,000 | £58,598 | £61,597 | £54,663 | inside |
| £450 | £99,000 | £63,793 | £67,977 | £60,186 | inside |
| £500 | £110,000 | £68,988 | £72,357 | £65,710 | inside |
| £600 | £132,000 | £78,996 | £81,746 | £73,930 | inside |
| £750 | £165,000 | £89,310 | £99,236 | £87,423 | inside |
Two patterns stand out. Inside IR35 leaves more than outside at every rate in this table, because the outside route now pays Corporation Tax and then dividend tax of 10.75 % or 35.75 % on the same money, while the inside figure bears no employer National Insurance. And the umbrella column is always lowest: it is employment income like the inside figure, with the employer’s own costs taken out first.
How each column is worked out
Outside IR35. The company receives the fees, pays the costs, then the salary that leaves the most cash (£12,570 at £450 a day) and employer National Insurance on it, with no Employment Allowance for a sole director. Corporation Tax of £18,323 follows, and the rest is paid as dividends taxed at £13,749.
Inside IR35. The fee is treated as employment income. The deemed employer deducts Income Tax (£27,032) and employee National Insurance (£3,991) and pays employer National Insurance itself (HMRC, off-payroll working). Company costs are ignored here.
Umbrella. From the £99,000 paid to the umbrella come its margin (£920), employer National Insurance (£12,085) and the levy (£428). What remains is gross pay of £85,567, taxed through PAYE. Holiday pay and pension contributions also appear on real umbrella pay statements; the umbrella calculator explains each line.
What moves the result
Student loans first. Inside IR35 the deemed employer does not deduct them, so they arrive in the Self Assessment bill: a Plan 2 borrower at £450 a day owes £6,265. Then the number of days: holidays, gaps between contracts and sickness are days without fees, so 200 days is a cautious figure for planning. And the company’s costs (insurance, accountancy, equipment) reduce Corporation Tax outside IR35 but are simply spent inside it.
The status itself is not chosen with a calculator. Medium and large clients decide it and explain why in a status determination statement; the IR35 guide covers who decides and how.