Inside vs outside IR35 calculator
Enter the inside and outside rates for the same work. Inside is taxed as employment through an umbrella and outside runs through your own company, with every deduction listed for both.
Rates for the 2026/27 tax year. Checked 6 November 2026.
| Outside, Ltd | Inside, umbrella | |
|---|---|---|
| Billed | £110,000.00 | £110,000.00 |
| Umbrella margin | — | − £1,100.00 |
| Employer NI | − £1,135.50 | − £13,490.26 |
| Apprenticeship levy | — | − £474.68 |
| Expenses | − £2,000.00 | — |
| Corporation tax | − £21,238.05 | — |
| Income tax | − £0.00 | − £25,406.02 |
| Employee NI | − £0.00 | − £3,909.30 |
| Dividend tax | − £16,638.93 | — |
| Take-home | £68,987.52 | £65,619.74 |
| Of what was billed | 62.7% | 59.7% |
| A month | £5,749 | £5,468 |
Inside figures assume holiday pay is rolled up and you opt out of the umbrella pension. Your IR35 status is set by the contract and how you work, so this shows what each outcome is worth rather than which one applies.
Worked example: £500 a day both ways
At £500 a day both ways, outside IR35 leaves about £68,988 and inside leaves about £65,620. Outside, £110,000 goes through a limited company with a £12,570 salary and £2,000 of expenses, then corporation tax and dividend tax. Inside, the £25 weekly umbrella margin, 15% employer National Insurance and 0.5% apprenticeship levy come off the same assignment income before gross pay of about £94,935, and PAYE and employee NI come off after.
The gap is narrow at this rate because dividend tax rose in April 2026 and corporation tax above £50,000 of profit runs at 25% less marginal relief. Expenses claimed outside widen it. If the agency offers an uplift for inside work, put it in the inside rate and see how much of the gap it closes before you agree a number.
What inside IR35 means for your pay
The fee payer must tax you as an employee, with PAYE and both kinds of National Insurance, and you cannot claim travel and subsistence for the assignment. You get no employment rights from the client. Most inside contracts run through an umbrella, which becomes your employer; the umbrella calculator adds pension, student loan and your tax code.
When this calculator is wrong for you
- Your umbrella deducts a pension contribution you have not opted out of.
- Your inside offer is a PAYE rate from the agency, not an assignment rate; then there is no employer NI to model.
- You live in Scotland.
- You are inside IR35 but paid through your own company as a deemed payment, which is rare now.
Questions people ask
How much higher should an inside IR35 rate be?
There is no fixed uplift, but agencies may add 10% to 20% to the inside rate to cover employer costs. Enter the rate you have actually been offered; nothing is added for you.
Can I claim expenses inside IR35?
Mostly no. Travel and subsistence for the assignment cannot be claimed, and umbrella expense schemes are heavily restricted. Pension contributions through salary sacrifice are the main thing left.
Who decides my IR35 status?
The client, if it is medium or large; you, if it is small. HMRC’s CEST tool gives an indicative answer, but the contract and working practices decide.
Why does my umbrella deduct apprenticeship levy?
Umbrellas with a pay bill over £3 million pay 0.5% of it to HMRC. Like employer NI, they take it from the assignment rate before your gross pay.
Is employer NI part of the umbrella margin?
No. The margin is the umbrella’s fee. Employer NI and the levy are separate statutory costs taken from the assignment rate, and a good umbrella shows them on your payslip reconciliation.
How this is worked out
Outside: revenue less salary, employer NI at 15% above £5,000 and expenses gives profit; corporation tax at 19% to £50,000, 25% from £250,000 with marginal relief between; all post-tax profit paid as dividends; dividends taxed above salary at 10.75%, 35.75% and 39.35% after the £500 allowance. Inside: assignment income less the umbrella margin; employer NI at 15% above £5,000 and apprenticeship levy at 0.5% are solved out of what remains to give gross pay; income tax and employee NI are then applied to gross pay. Holiday pay is assumed rolled up.
Full formulas, rounding rules and test cases are on the methodology page. Every rate update is listed in the changelog.