IR35 Tax Calculator

Enter your contractor details for accurate IR35 calculations.

Contract Rate (£)

£

Rate Type

Days per Week

Hours per Week

Weeks per Year

Annual Company Expenses (£)

£

Annual Pension Contribution (£)

£

Pension Type

Director Salary (£)

£

Optimise salary (choose best of £9,100 vs £12,570)

Other Non-Dividend Income (£)

£

IR35 Tax Impact Results

Outside IR35

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Inside IR35

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Annual Difference

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Contractor Impact Summary

Item	Outside IR35	Inside IR35	Difference

Important: This tool provides estimates based on 2024–25 rates. Your actual position may vary. Always consult a qualified accountant.

IR35 Explained: Inside vs Outside (2024–25)

IR35 (off-payroll working) determines whether your engagement is employment-like for tax purposes. If you are inside IR35, most of your contract income is treated as salary via PAYE with employee National Insurance. If you are outside IR35, you typically take a small director salary and distribute profits as dividends after corporation tax. Key factors include control, substitution, and mutuality of obligation (MOO), plus working practices vs the written contract.

This IR35 calculator shows your take-home pay, dividend tax, corporation tax, and PAYE side by side, using the 2024–25 tax rules: Personal Allowance £12,570 (tapered above £100k), higher rate threshold £50,270, additional rate from £125,140, dividend allowance £500, marginal corporation tax (19% small profits to 25% main rate), and employee NI at 8% over the primary threshold. Use the pension toggles to test employer vs employee contributions.

Popular searches: IR35 calculator UK, outside IR35 take-home, inside IR35 PAYE, limited company vs umbrella, contractor tax calculator, dividend tax calculator, corporation tax for contractors, director salary optimisation, personal allowance taper, higher rate tax, additional rate tax, deemed payment, SDC, substitution clause, MOO, working practices, HMRC status test, CEST alternative.

IR35 Calculator — Frequently Asked Questions

How does this IR35 calculator work?

We calculate annual contract revenue from your rate, days/hours, and weeks worked. For Outside IR35 we deduct company expenses, employer pension and employer NI (where applicable), compute corporation tax, then dividends and dividend tax. For Inside IR35 we treat income as PAYE salary, apply income tax and employee NI, and allow employee pension to reduce taxable pay. The summary shows monthly and annual take-home and the difference.

What counts as ‘inside IR35’?

If the client’s control over your work is employment-like, if you cannot send a genuine substitute, and if there’s ongoing mutuality of obligation, your engagement can be inside IR35. In the public sector (and most medium/large private clients) the client is responsible for the status determination and the fee-payer must run PAYE.

Which tax year does this use?

2024–25 rates and thresholds (Personal Allowance £12,570; higher rate from £50,270; additional rate from £125,140; dividend allowance £500; corporation tax small profits 19% / main rate 25% with marginal relief). Employee NI uses the primary threshold and an 8% main rate.

Should I set director salary at £9,100 or £12,570?

It depends on profits, employer NI and allowances. Tick “optimise salary” and the tool compares both and picks the higher take-home outcome automatically.

Umbrella vs Limited: which is better for me?

If you’re inside IR35 or want low admin, umbrella can be simpler (PAYE with holiday pay and statutory benefits). If you’re outside IR35 and value control and efficiency, a limited company can be more tax-efficient long-term. Always consider your client’s status decision and seek advice.

Is this financial advice?

No—use this as an estimate only. Speak to a qualified accountant for personalised guidance.

When to Review Your IR35 Status

Review status at onboarding, when your statement of work changes, on renewal, or if your working practices shift (e.g. client control, deliverables, location). Keep evidence of substitution rights, project-based deliverables, and financial risk. Clear documentation supports an outside IR35 position.

Use this IR35 calculator alongside your contract review, status determination statement (SDS), and professional advice. Keywords that matter for contractors: IR35 status test, off-payroll working rules, contractor take-home pay, National Insurance, PAYE, dividends, corporation tax, pension contributions, umbrella company, limited company, contract rate negotiation.