Contractor vs Employed Calculator — 2026/27
Highest take-home
Outside IR35 (Ltd company)
£69,952
Lowest take-home
Umbrella company
£62,989
Going from Umbrella company to Outside IR35 (Ltd company) is worth approximately £6,962 per year on a £110,000 contract.
Side-by-side breakdown
| Scenario | Annual Take-Home | Total Tax/NI/CT | Effective Rate |
|---|---|---|---|
| Outside IR35 (Ltd company) | £69,952 | £37,048 | 33.7% |
| Inside IR35 (PSC) | £63,743 | £43,257 | 39.3% |
| Umbrella company | £62,989 | £42,711 | 38.8% |
| Permanent employment (equivalent) | £66,036 | £29,617 | 31.0% |
Permanent salary that matches this contract
The gross PAYE salary whose total package (take-home + employer pension + benefits) equals the contractor's net take-home in the chosen scenario. Adjust the benefits to match a real offer.
Equivalent permanent salary
£82,273
A £82,273 gross salary plus the benefits above gives the same total package value as the Umbrella company take-home of £62,989. A perm with 33 paid days off works ~227 days for that salary; the contractor at £500/day works 220 billed days.
Methodology. Outside IR35 uses the shared tax engine (salary at the primary NI threshold; remainder taken as dividends after Corporation Tax). Inside IR35 and umbrella both compute employer NI on the assignment rate before applying employee PAYE + Class 1 NI. The "Permanent employment (equivalent)" column normalises by employer cost — the salary that would cost the employer the same as the day-rate contract once their share of NI is included.
The 5% deductible allowance previously available on inside-IR35 engagements was withdrawn for the private sector in April 2021 (and 2017 in the public sector) and is therefore not applied. Apprenticeship Levy (0.5%) and any auto-enrolment pension contributions are excluded.
What-if: rate sensitivity
See annual take-home if your day rate moves up or down. Add a custom % to test any scenario.
| Δ | Day Rate | Outside IR35 (Ltd) | Inside IR35 | vs base |
|---|---|---|---|---|
| -20% | £400/day | £59,239 | £52,897 | -£10,713 |
| -10% | £450/day | £64,595 | £58,320 | -£5,356 |
| -5% | £475/day | £67,274 | £61,032 | -£2,678 |
| Base | £500/day | £69,952 | £63,743 | — |
| +5% | £525/day | £72,630 | £66,455 | +£2,678 |
| +10% | £550/day | £75,308 | £69,061 | +£5,356 |
| +20% | £600/day | £80,558 | £73,549 | +£10,607 |
All other inputs (working days, expenses, IR35 tier, fees, tax year) are held constant. Adjust them above to re-run the table.
What is the Contractor vs Employed Comparison?
Contractor vs Employed Comparison is a free UK calculator using current HMRC rates for 2024/25, 2025/26 and 2026/27. It produces estimates only — for personalised advice consult a qualified accountant or tax adviser.
Last reviewed: against HMRC rates for 2024/25 & 2025/26.
Worked example
Enter the figures in the calculator above to see the result for your situation, then export or print the breakdown for your records.
Frequently asked questions
+Is this calculator free?
Yes. All calculators on UK Tax Tools are completely free, with no sign-up, no paywall, and no email collection.
+Are the figures accurate?
We update calculations against HMRC's published rates for 2024/25, 2025/26 and 2026/27. The output is an estimate for guidance only — for binding advice consult a qualified accountant.
+Does the calculator save my inputs?
No. Everything runs in your browser; nothing is sent to a server or stored. Refreshing the page resets the form.
+Can I print or export the result?
Yes — use your browser's Print menu (or the Print button where available). The page is styled for clean A4 printing.