What is assignment income?

Assignment income is the amount billed before umbrella margin, employer costs, PAYE tax, employee National Insurance, pension, and loan deductions.

Is employer National Insurance paid by me?

Inside IR35 contracts often quote an assignment rate from which employment costs are funded. Check your key information document and contract.

Inside IR35 Calculator - Umbrella PAYE Net Pay Estimate

How to use this inside IR35 calculator

Enter the assignment rate, working pattern, umbrella margin, employment cost treatment, pension contribution, student loan plan, and tax year. The result shows the assignment income first, then the salary and PAYE deductions.

Methodology and formula

The calculator starts with assignment income, subtracts umbrella margin, then uses a binary search to find the gross salary that fits after employer National Insurance and apprenticeship levy where those costs are deducted.

assignment_income = day_rate * days_per_week * weeks_per_year
available_salary_pot = assignment_income - umbrella_margin
gross_salary + employer_NI + apprenticeship_levy = available_salary_pot

Example calculation

A £550 day rate over 230 billable days gives £126,500 assignment income. The calculator deducts the configured umbrella margin and employment costs before applying PAYE deductions to the resulting salary.

Important considerations

Check whether your quoted rate is an assignment rate or taxable salary. Umbrella margins, holiday pay treatment, pension method, tax code, Scottish taxpayer status, and agency deductions can materially change net pay.

FAQ

Why is gross assignment income not the same as salary?

The assignment rate is the contract value. An umbrella employee salary can be lower after the margin and employment-related costs are funded.

Should apprenticeship levy always be deducted?

Not always. The calculator lets you model both treatments because umbrella and agency documents can present costs differently.

Disclaimer

Results are estimates and are not tax, financial, legal, employment, or payroll advice. Verify assumptions with your umbrella company, agency, accountant, or adviser.