Free tool for UK contractors

IR35 Calculator 2025/26

Compare your take-home pay inside vs outside IR35. Enter your contract value and see the annual difference, including Income Tax, National Insurance, Corporation Tax and dividends.

For guidance only. Figures are estimates based on 2025/26 HMRC rates and a typical optimised outside-IR35 structure (minimum salary + dividends). Speak to an accountant for advice specific to your situation.

Your contract

Day rate (£) Your daily charge-out rate

Days worked per year Typical: 220 days (44 weeks)

Allowable expenses/year (£) Outside IR35 only: business costs

Tax year

Your results

Outside IR35

£0

Annual take-home pay

Inside IR35

£0

Annual take-home pay

Annual cost of being inside IR35 £0 less

How these figures are calculated

Item	Outside IR35	Inside IR35

These figures assume an optimised outside-IR35 structure: a minimum salary equal to the National Insurance Secondary threshold (£9,100 in 2025/26) with remaining profit taken as dividends. Inside IR35 figures treat the full contract value as deemed employment income after employer NICs.

Your actual figures may differ depending on your company costs, other income sources, pension contributions and accountant fees. Always take professional advice before making IR35 decisions.

Band	Rate
Personal Allowance (up to £12,570)	0%
Basic rate (£12,571 to £50,270)	20%
Higher rate (£50,271 to £125,140)	40%
Additional rate (over £125,140)	45%

Type	Rate
Employee Class 1 (£12,570+)	8%
Employer Class 1	15%
Corporation Tax (up to £50k profit)	19%
Corporation Tax (£50k-£250k)	marginal
Dividend allowance	£500
Basic rate dividend tax	8.75%
Higher rate dividend tax	33.75%

Frequently asked questions about IR35

What is IR35?

IR35 is a set of UK tax rules (officially called the Off-Payroll Working rules) that determine whether a contractor working through a limited company should be taxed as an employee. If HMRC considers a contract to be inside IR35, the contractor must pay Income Tax and National Insurance at the same rates as employees, significantly reducing take-home pay compared to working outside IR35 through a limited company.

How much less do you earn inside IR35?

Working inside IR35 typically reduces take-home pay by 20 to 30 per cent compared to an equivalent contract outside IR35, depending on your contract value and personal circumstances. The exact difference depends on your day rate, other income, and how you structure your limited company when working outside IR35. Use the calculator above to see the specific difference for your own day rate.

Who decides if a contract is inside IR35?

For contracts in the private sector with medium or large end clients (since April 2021), the end client makes the IR35 determination using a Status Determination Statement (SDS). For contracts with small companies, the contractor's own limited company makes the determination. HMRC also has the right to challenge IR35 status, which is why many contractors seek an independent contract review from a specialist IR35 lawyer or adviser before accepting a new engagement.

Can I still work through a limited company if I'm inside IR35?

Yes, but your limited company will need to operate a PAYE payroll and deduct Income Tax and National Insurance from deemed payments before making any payments to you. The financial benefit of working through a limited company is largely eliminated when you are inside IR35, which is why many contractors in this situation choose to work through an umbrella company instead, which handles PAYE administration on their behalf.

What is the IR35 small company exemption?

If your end client qualifies as a small company under the Companies Act 2006 (meeting two of three criteria: turnover under £10.2m, balance sheet under £5.1m, fewer than 50 employees), then your own limited company, not the end client, makes the IR35 determination. This can provide more flexibility, but the rules changed in April 2023 and the thresholds may change in future. Always check the current definition of "small company" before relying on this exemption.