About this calculator
Inside IR35 Calculator — PAYE-style take-home pay for UK contractors
Our Inside IR35 Calculator estimates the take-home pay of a UK contractor whose engagement falls inside IR35 and is therefore taxed as employment. Enter your day rate or assignment rate and see net pay after PAYE Income Tax, employee National Insurance, employer NI, the apprenticeship levy, umbrella margin and any pension contributions for the 2025/26 tax year.
It is designed for contractors working through an umbrella company, agency PAYE workers, and end clients or recruiters reviewing offers under the off-payroll working rules. Permanent employees considering a move into contracting can also use it to compare an inside IR35 day rate against their current salary.
The model treats the assignment rate as the umbrella's total cost. We deduct employer NI at 15% above the secondary threshold, the 0.5% apprenticeship levy and the umbrella's weekly margin to derive your gross taxable pay. Standard PAYE then applies: the £12,570 personal allowance, 20%, 40% and 45% Income Tax bands, and Class 1 employee NI at 8% and 2%. Figures are estimates and may vary with tax code, salary sacrifice pension and individual circumstances — always check a final umbrella illustration before signing.
Money Tools UK
Inside IR35 Calculator
Estimate your take-home pay when working inside IR35 through an umbrella company or PAYE arrangement.
What does inside IR35 mean?
Inside IR35 income is commonly paid through an umbrella company or PAYE arrangement. This calculator uses the same umbrella PAYE deduction model to estimate take-home pay.
When a contract is inside IR35, HMRC treats it like employment for tax purposes. You pay PAYE income tax and National Insurance on your earnings, just like a permanent employee. Take-home pay is usually lower than outside IR35 limited company contracting because there is no salary/dividend split. For a side-by-side breakdown see the Umbrella Company Calculator.
Between 0 and 7 days.
Between 1 and 52 weeks.
Weekly fee charged by the umbrella company.
Between 0% and 100% of gross salary.
1257L is the standard UK tax code used for most employees and contractors.
Allowable business expenses reimbursed through the umbrella.
Estimated annual take-home pay
Calculation assumptions
- UK 2025/26 PAYE thresholds and tax bands.
- Employer NI 15% above £5,000; apprenticeship levy 0.5%.
- Employer costs deducted from the assignment rate before gross PAYE salary.
- Tax code 1257L assumed unless changed.
- Hourly mode assumes 8 working hours per day.
£59,742
Typical for a UK umbrella contractor.
Monthly
£4,978.49
Weekly
£1,298.74
Total deductions
£43,758
PAYE income tax
£21,352
Employee NI
£3,707
Employer NI
£12,640
Umbrella margin
£1,150
Pension
£4,463
Student loan
£0
Deduction breakdown
How your annual contract income flows from the assignment rate to net pay.
| Annual contract income | £103,500 |
| Less: umbrella margin | −£1,150 |
| Less: expenses (reimbursed tax-free) | £0 |
| Less: employer NI | −£12,640 |
| Less: apprenticeship levy | −£446 |
| Gross taxable salary | £89,264 |
| Less: pension contribution | −£4,463 |
| Taxable pay | £84,801 |
| Less: PAYE income tax | −£21,352 |
| Less: employee NI | −£3,707 |
| Less: student loan | £0 |
| Plus: expenses reimbursement | £0 |
| Net annual take-home | £59,742 |
Holiday pay is included in the rate (rolled up). Tax code 1257L assumed. 2025/26 thresholds.
Comparing to permanent employment? Try the Take-Home Pay Calculator or convert a salary using the Salary to Hourly Calculator.
How this umbrella calculator works
Inside IR35 FAQs
Related contractor tools
See outside IR35 take-home pay
Contractor Calculator (Outside IR35) — salary, dividends and corporation tax.
Compare inside vs outside IR35
PAYE, umbrella and limited company side by side.
Compare umbrella vs limited company
Umbrella Company Calculator — same engine, contractor-focused framing.
Take-Home Pay Calculator
Standard PAYE salary baseline.
This calculator provides estimates only and should not be treated as tax, payroll or financial advice. Umbrella company deductions and tax treatment can vary.
At-a-glance comparison
How the main UK contracting routes compare
Tax, take-home pay, admin, pensions and expenses across PAYE, umbrella and limited company — plus the practical differences between inside and outside IR35 engagements.
PAYE vs Umbrella vs Limited Company
A side-by-side view of the three main UK contracting structures for the 2025/26 tax year.
| Factor | Agency PAYE Employee of the agency | Umbrella Company Inside IR35 default | Limited Company Outside IR35 |
|---|---|---|---|
| Tax treatment | PAYE Income Tax + employee NI on full assignment rate. | PAYE + employee & employer NI + apprenticeship levy + margin. | Salary up to NI threshold + dividends; corporation tax 19–25%. |
| Typical take-home | ≈ 60–68% of assignment rate after PAYE & NI. | ≈ 55–65% after employer costs and umbrella margin. | ≈ 75–82% on a typical £500/day contract outside IR35. |
| Admin burden | None — agency runs payroll, you receive a payslip. | Minimal — submit timesheet, umbrella handles payroll. | Higher — bookkeeping, VAT, payroll, annual accounts, CT600. |
| Pension flexibility | Auto-enrolment workplace pension at statutory minimums. | Salary sacrifice usually available — efficient employer contributions. | Fully flexible — employer contributions up to £60k annual allowance. |
| Expense treatment | No business expenses claimable against agency income. | Limited; SDC rules generally block travel & subsistence. | Wholly & exclusively business expenses fully deductible. |
| Best for | Short bookings or contractors who want zero admin. | Inside IR35 engagements and short-term contracts. | Outside IR35, longer engagements, higher day rates. |
Tax treatment
Agency PAYE
Umbrella Company
Limited Company
Typical take-home
Agency PAYE
Umbrella Company
Limited Company
Admin burden
Agency PAYE
Umbrella Company
Limited Company
Pension flexibility
Agency PAYE
Umbrella Company
Limited Company
Expense treatment
Agency PAYE
Umbrella Company
Limited Company
Best for
Agency PAYE
Umbrella Company
Limited Company
Inside IR35 vs Outside IR35
How the off-payroll working rules change tax, take-home pay and day-to-day admin.
| Factor | Inside IR35 Taxed as employment | Outside IR35 Genuine business-to-business |
|---|---|---|
| Tax treatment | Full PAYE Income Tax + Class 1 NI on deemed employment income. | Tax-efficient salary + dividends through your limited company. |
| Take-home pay | Lower — typically 55–65% via umbrella, no salary/dividend split. | Higher — typically 75–82% net retention after corporation & personal tax. |
| Who decides status | Public sector & medium/large private clients issue a Status Determination Statement (SDS). | Same SDS process; small private clients leave the determination to the contractor. |
| Admin burden | Low — umbrella runs payroll; little for you to manage. | Higher — limited company filings, VAT and IR35 evidence to retain. |
| Pension flexibility | Salary sacrifice via umbrella — efficient but capped by assignment rate. | Employer contributions from the company up to £60k annual allowance. |
| Expense treatment | SDC rules typically block travel, subsistence and home-office claims. | Genuine business expenses (travel, equipment, software) fully deductible. |
| Risk profile | Low — status agreed up front, deductions handled by fee-payer. | Status must hold up to HMRC review; keep a contract & working-practices review. |
Tax treatment
Inside IR35
Outside IR35
Take-home pay
Inside IR35
Outside IR35
Who decides status
Inside IR35
Outside IR35
Admin burden
Inside IR35
Outside IR35
Pension flexibility
Inside IR35
Outside IR35
Expense treatment
Inside IR35
Outside IR35
Risk profile
Inside IR35
Outside IR35
Estimates for the 2025/26 UK tax year using HMRC thresholds. Individual circumstances vary — always confirm with a qualified accountant.
Trust & transparency
Why trust these calculations?
How Money Tools UK keeps every calculator accurate, current and transparent.
UK tax year 2025/26
Calculations use the current UK tax year bands, allowances and thresholds for England, Wales and Northern Ireland.
HMRC-aligned thresholds
Personal allowance, NI primary/upper limits, dividend bands, corporation tax and SDLT bands follow published HMRC rates.
Regularly updated
Rates are reviewed each Budget and Autumn Statement, then refreshed across every calculator on this site.
Transparent assumptions
Each tool documents its inputs, formulas and edge cases — no hidden fudge factors or marketing-led numbers.
Educational purpose
Results are estimates for guidance and learning only and are not personal tax, legal or financial advice.