UK IR35 Calculator 2026 (Inside vs Outside IR35 Take-Home Pay)
Compare Inside IR35 (umbrella company deemed employment) vs Outside IR35 (PSC limited company). Calculate employer NI, dividend tax, and net pay.
Operating Outside IR35 yields +£445.51/month (7.5% more take-home pay) compared to an umbrella company deemed contract.
Umbrella Deemed Contract
Limited Company (PSC)
UK IR35 Guide: Inside vs. Outside Take-Home Pay Comparison (2026)
A financial comparison between working Inside IR35 through an umbrella company versus Outside IR35 via a Limited Company Personal Service Company (PSC).
Operating Outside IR35 through your own Limited Company (PSC) typically yields 15% to 25% higher net take-home pay than working Inside IR35 at the exact same daily contract rate. This difference is driven by two factors: Inside IR35 contracts force the contractor to absorb Employer National Insurance (13.8%) and the 0.5% Apprenticeship Levy, whereas Outside IR35 allows tax-efficient remuneration through low PAYE salaries and shareholder dividend distributions.
The Status Determination Statement (SDS) & Off-Payroll Rules
Under the Off-Payroll Working rules, medium and large private sector businesses and public authorities are legally obligated to evaluate contractor employment status and issue a written Status Determination Statement (SDS). Key tests of employment include:
- Right of Substitution: Does your Limited Company hold the genuine contractual right to supply a qualified substitute contractor?
- Control & Supervision: Does the client control how, when, and where you perform the deliverables, or are you acting as an independent expert?
- Mutuality of Obligation (MOO): Is the client obligated to offer ongoing work, and are you obligated to accept it outside the specific scope of the statement of work?
Data Table: Inside vs. Outside IR35 Net Pay Benchmark (£ Day Rates)
| Contract Day Rate | Annual Billed (230 days) | Inside IR35 Net Pay | Outside IR35 Net Pay | Outside Advantage (£) |
|---|---|---|---|---|
| £400 / day | £92,000 | £52,400 (57.0%) | £65,800 (71.5%) | +£13,400 / yr |
| £550 / day | £126,500 | £68,900 (54.5%) | £86,400 (68.3%) | +£17,500 / yr |
| £750 / day | £172,500 | £90,200 (52.3%) | £114,800 (66.6%) | +£24,600 / yr |
Allowable Business Expenses Outside IR35
Operating outside IR35 enables Limited Companies to deduct legitimate business expenses—such as accountancy fees, professional indemnity insurance, computer equipment, home office allowances, and CPD training courses—from company revenue prior to Corporation Tax calculation.
Technical Breakdown & Formula Specifications
Transparent mathematical reference and standardized volume benchmarks
Mathematical Formula & Calculation Logic
Inside IR35 subjects contractor turnover to 13.8% Employer NI, 0.5% Apprenticeship Levy, Employee NI, and PAYE tax. Outside IR35 allows tax-efficient director salaries and dividends.
Standard Transaction Volume Tiers
Compare expected deductions across typical commercial ticket sizes
| Gross Transaction | Deductions | Net Received | Effective Rate |
|---|---|---|---|
| £400.00 | -£160.00 | £240.00 | 40.00% |
| £550.00 | -£215.00 | £335.00 | 39.09% |
| £800.00 | -£310.00 | £490.00 | 38.75% |
| £1,200.00 | -£460.00 | £740.00 | 38.33% |
UK IR35 Calculator — Frequently Asked Questions
Authoritative answers to common questions, regulatory rules, and compliance guidance.