IR35 calculator
An inside rate is not the same money.
Contractors are often offered the same day rate and told the only difference is paperwork. It is not. Inside IR35, employer National Insurance, the apprenticeship levy and the umbrella's margin all come out of the assignment rate before anyone works out your pay. This shows the gap, and the uplift that would close it.
The contract
The rate the client pays for the assignment, before anyone deducts anything.
Working days you will actually bill across the year.
What the umbrella company keeps. Usually quoted weekly or monthly, commonly £15 to £30 a week.
Accountancy, payroll and filing, which only apply on the outside route.
The same contract inside IR35 costs you
£4,095
To be left equally well off, an inside assignment would need to pay £534 a day, an uplift of 7%.
Outside IR35
Better£64,643
in your pocket
- Company running costs
- −£1,200
- Salary taken
- £12,570
- Employer NI
- −£1,136
- Corporation tax
- −£18,800
- Dividends paid
- £66,294
- Dividend tax
- −£14,222
- In your pocket
- £64,643
Inside IR35
£60,548
in your pocket
- Assignment value
- £100,000
- Umbrella margin
- −£1,200
- Employer NI
- −£12,179
- Apprenticeship levy
- −£431
- Gross pay
- £86,190
- Income tax
- −£21,908
- Employee NI
- −£3,734
- In your pocket
- £60,548
2026/27 rates for England, Wales and Northern Ireland. Outside assumes your own company taking a £12,570 salary with the rest as dividends. Inside assumes an umbrella that passes on employer National Insurance and the apprenticeship levy, which is the normal arrangement. Neither figure includes pension contributions.
What inside IR35 means
The deduction stack. The client agrees an assignment rate with the fee payer. Out of that comes the umbrella margin, then employer National Insurance at 15% on pay above £5,000, then the apprenticeship levy at 0.5%. Only what survives becomes your gross pay, which is then taxed like a salary.
Why employer NI lands on you. Legally it is the employer's cost. In practice the assignment rate is set to cover it, so a contractor bears it in the form of a lower rate. That is the single largest reason inside pays less.
Expenses mostly stop. Working inside IR35 removes the ability to claim most travel and subsistence against the engagement. This calculator does not model those, so the real gap is often wider than shown here.
Status is not your choice. For medium and large clients, the client determines status and carries the liability. Use this to negotiate the rate, not to decide the status yourself. If you think a determination is wrong, there is a formal disagreement process.