IR35 Calculator — Inside vs. Outside
What is the IR35 Calculator (Inside vs Outside)?
IR35 (the off-payroll working rules) determines whether a contractor working through a personal-service company is genuinely self-employed (outside IR35) or effectively an employee (inside IR35). Inside-IR35 contracts have employment taxes deducted at source by the client, materially reducing take-home pay versus an outside-IR35 limited-company arrangement.
Last reviewed: against HMRC rates for 2024/25 & 2025/26.
Worked example
A £500/day contract over 220 days = £110,000 gross. Outside IR35 take-home is typically ~£80–85k via salary + dividends; inside IR35 it falls to ~£65–70k after employer NI and PAYE.
Frequently asked questions
+How do I know if I'm inside or outside IR35?
Use HMRC's Check Employment Status for Tax (CEST) tool, plus a contract review. Key tests: substitution rights, control by the client, mutuality of obligation, and integration into the client's organisation.
+Who decides the IR35 status?
Since April 2021 in the private sector (and 2017 in the public sector), the end client determines status for medium and large businesses. Small private-sector clients are exempt — the contractor's PSC determines status.
+How much does IR35 cost a contractor?
Typically £10,000–£20,000 per year in extra tax and NI on a £100k contract, depending on dividend strategy. Use this calculator to model your specific rate and engagement length.
+Can I be paid via an umbrella company outside IR35?
No — umbrella employment is full PAYE and is in effect 'inside' the IR35 outcome by design. To genuinely operate outside IR35 you need a PSC and a contract that passes the status tests.