UK IR35 Calculator 2026/27
Compare your 2026/27 net take-home pay inside IR35 (PAYE) versus outside IR35 (limited company). See the true financial impact of your IR35 status.
Last updated: May 2026
Typically set to personal allowance (£12,570) for tax efficiency
Outside IR35 Take-Home
£70,336
£5,861/month
Inside IR35 Take-Home
£71,977
£5,998/month
Annual Difference
£-1,641
Better off outside IR35
Reviewed by Sneha Iyer, CFP
•Certified Financial PlannerSpecializing in wealth management and retirement planning. Sneha validates the investment projection models and compound interest algorithms used across our financial tools. All mathematical models and regulatory data points have been verified for the current 2026 fiscal period.
What is IR35?
IR35 is UK tax legislation that determines whether a contractor should be taxed as an employee (inside IR35) or as a genuinely self-employed person working through a limited company (outside IR35). HMRC uses IR35 to prevent disguised employment.
If your contract is inside IR35, your income is taxed like a salary with income tax and NI deducted. Outside IR35 allows you to pay yourself a combination of salary and dividends, which is typically more tax-efficient.
How to use this calculator
- 1Enter your day rate — Input your contract daily rate or annual contract value.
- 2Set working days — Enter the number of days you expect to work per year.
- 3Enter expenses — Add allowable business expenses if outside IR35.
- 4Compare results — See net take-home inside vs outside IR35 side by side.
Formula & example
Inside IR35 Net = Contract Rate - Income Tax - NI | Outside IR35 Net = Salary + Dividends - Corporation Tax - Income Tax - Dividend Tax
Example: Day rate of 600 (approx 156,000/year). Inside IR35 take-home approx 87,000. Outside IR35 via limited company approx 108,000. Annual difference approx 21,000.
Benefits
Side-by-side comparison
See the exact pound difference between inside and outside IR35.
2026/27 rates
Uses current income tax, NI, and dividend tax rates.
Expenses modelling
Includes the impact of allowable business expenses on outside IR35 income.
Informed decision making
Understand the financial consequence of your IR35 status before signing a contract.
Use cases
New contract assessment
Evaluate whether a new contract offer is financially viable inside IR35.
Rate negotiation
Calculate the day rate increase needed inside IR35 to match your outside IR35 take-home.
Umbrella vs limited company
Compare umbrella company PAYE against your own limited company outside IR35.
Tax planning
Understand the most tax-efficient way to extract income from your limited company.
Frequently asked questions
What is the difference between inside and outside IR35?+
Inside IR35 means HMRC considers you an employee of your client, and your income is taxed as employment income with full PAYE. Outside IR35 means you are genuinely self-employed and can use a limited company structure with more tax-efficient extraction.
Who decides my IR35 status?+
For contracts with medium and large private sector clients, the client (end user) determines IR35 status and issues a Status Determination Statement. For small private sector clients and public sector contracts, you assess your own status.
What is the penalty for getting IR35 wrong?+
If HMRC determines you should have been inside IR35, you owe unpaid income tax, NI, and interest on the underpaid amounts. Penalties can also apply. HMRC can investigate up to 6 years back.
Can I appeal an IR35 determination?+
Yes. If your client issues a Status Determination Statement you disagree with, you have the right to a client-led disagreement process. You can also seek an HMRC CEST tool assessment or legal advice.
Is IR35 the same as off-payroll working rules?+
Off-payroll working rules are the administrative rules that implement IR35 for medium and large businesses. They shift the responsibility for determining IR35 status to the end client rather than the contractor.