Compare contractor take-home inside IR35 (deemed employment payment with employer NIC and apprenticeship levy) versus outside IR35 through a limited company (corporation tax + dividends).
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Models the 2025/26 deemed employment payment chain: the fee is grossed down for employer NIC (15%) and apprenticeship levy (0.5%), then income tax and employee NIC are applied. The outside route pays a £12,570 salary, corporation tax with marginal relief, and distributes the remainder as dividends.
£500/day over 220 days (£110,000 fee, large client): inside IR35 nets £66,172 (deemed payment £95,887 after £13,633 employer NIC and £479 levy); outside nets £71,413 (£21,768 corporation tax, £15,684 dividend tax). Being inside costs £5,240/yr (4.8% of the fee).
Enter your day rate and billable days per year.
Select whether the client is a small company (Chapter 8 — 5% expenses allowance applies).
Compare net income inside vs outside IR35 and the effective cost of being inside.
Last data update
July 5, 2026
Sources and references
HMRC — Understanding off-payroll working (gov.uk/guidance/understanding-off-payroll-working-ir35); rates and thresholds for employers 2025/26; ESM8155 (5% expenses allowance).
The data in this calculator is updated regularly to reflect the latest official rates. When in doubt, consult the official sources listed above.
For medium and large clients, the client issues a Status Determination Statement and the fee-payer deducts tax at source. For small clients, your own company assesses status and operates the deemed payment if inside.
The fee-payer's employer NIC (15% in 2025/26) and apprenticeship levy (0.5%) come out of the contract fee before the deemed payment is taxed, which is why inside-IR35 take-home drops sharply.
No — it is a simplified model (£12,570 salary, full dividend distribution, no expenses or pension planning). Actual results depend on your company's costs and remuneration strategy.