Contractor Take-Home Pay Calculator
Compare your take-home pay for contracts both 'Inside' and 'Outside' IR35. Enter your day rate to see an estimate of your net income for the 2025/26 tax year.
Contractor Calculator
Estimate your take-home pay based on your IR35 status.
Estimated Take-Home Pay
This is an estimate. Always consult a qualified accountant.
Annual Revenue / Gross
£96,000.00
Net Take-Home Pay (Annual)
£62,669.00
(£5,222.42 / month)
Deductions Breakdown
Annual Expenses
£5,000.00
Pension Contribution
£0.00
Corporation Tax (19%)
£17,290.00
Dividend Tax
£11,041.00
Understanding Your Contractor Pay
Contracting in the UK offers flexibility, but your take-home pay can vary significantly depending on your IR35 status. This guide helps you understand the difference.
Inside IR35 (Deemed Employment)
Your contract is treated like a permanent job for tax purposes.
When a contract falls 'inside IR35', the client or agency paying you is required to deduct Income Tax and National Insurance Contributions (NICs) before you receive the funds, just like a regular employee. Often, this means being paid via an umbrella company.
- You pay PAYE tax and Class 1 NI.
- You cannot claim business expenses against your tax.
- Your take-home pay is generally lower, but your tax affairs are simpler.
- Our calculator handles these deductions automatically when you select this option.
Outside IR35 (True Business-to-Business)
You operate as a genuine limited company (PSC).
When 'outside IR35', you are responsible for your own taxes. You invoice the client for the full amount and manage your company's finances.
- Your company pays Corporation Tax on its profits.
- You can claim allowable business expenses.
- You typically pay yourself a small, tax-efficient salary and take the rest as dividends.
- This often results in higher take-home pay but comes with more administrative responsibility. Our freelancer calculator can help with this.
Key Differences
Control
Outside IR35 contractors have more control over how, when, and where they work. Inside IR35 often involves supervision similar to an employee.
Tax Efficiency
Operating outside IR35 is generally more tax-efficient due to the way dividends are taxed compared to salary. Use our tool to see the exact difference.