IR35 Take-Home Pay Calculator

Compare your take-home pay inside and outside IR35 as a contractor working through a limited company.

Last updated: April 2026 · Source: GOV.UK — Understanding off-payroll working (IR35)

£
£

Outside IR35

£73,003.00

Effective rate: 33.63%

Inside IR35

£73,357.40

Effective rate: 33.31%

Annual Difference

-£354.40

more per year outside IR35

Note:

Outside IR35: salary + dividends via Ltd company (optimal split).

Inside IR35: taxed as employment (PAYE + employee NI + employer NI).

This is a simplified estimate. Actual figures depend on individual circumstances.

Disclaimer

This calculator is provided for informational purposes only and should not be considered as financial or tax advice. All calculations are performed locally in your browser — no personal data is collected or sent to our servers. Rates and thresholds are sourced from HMRC and GOV.UK and are updated for the current tax year. Always verify results with HMRC or consult a qualified professional before making financial decisions.

How It Works

IR35 is tax legislation that determines whether a contractor working through a limited company should be taxed as an employee. When a contract is inside IR35, the end client or agency must deduct income tax and employee National Insurance from payments, and pay employer NI on top. This significantly reduces the contractor's take-home pay.

Outside IR35, the contractor pays themselves a low salary (typically the NI Primary Threshold of £12,570) and takes remaining profits as dividends. Dividends are taxed at lower rates: 8.75% basic, 33.75% higher and 39.35% additional, after a £500 dividend allowance. Corporation Tax at 25% (or 19% for small profits) is paid on company profits first.

This calculator compares take-home pay inside and outside IR35 for a given contract rate. It shows the gross difference, accounting for corporation tax, dividend tax, employer NI, employee NI and income tax under both scenarios. The results help contractors understand the financial impact of IR35 status.

Example: £500/day contractor, 220 working days

  1. Annual gross: £500 × 220 = £110,000
  2. Outside IR35 (salary £12,570 + dividends): take-home approx. £81,500
  3. Inside IR35 (deemed employment): take-home approx. £65,200
  4. Annual difference: approx. £16,300 less inside IR35
  5. Inside IR35 employer NI (15%): approx. £14,600 extra cost

Source: GOV.UK — Understanding off-payroll working (IR35)

Frequently Asked Questions

What does the IR35 Take-Home Pay Calculator do?
Compare your take-home pay inside and outside IR35 as a contractor working through a limited company. All calculations are performed in your browser using official UK rates and thresholds.
Is this suitable for my business?
This calculator provides general estimates based on standard UK business rates and rules. Every business is different — consult your accountant for advice specific to your circumstances.
Does this use 2025/26 tax rates?
Yes. All rates and thresholds are based on the current 2025/26 UK tax year. Corporation Tax main rate is 25% for profits over £250,000, with a 19% small profits rate.