IR35 & Contracting
IR35 Tax Calculator
Estimate contractor taxes under inside and outside IR35 using the shared UK tax-year configuration.
Estimated net income
£71,830.99
56.78% retention. Tax year 2026/27.
| Item | Inside | Outside |
|---|---|---|
| Gross annual contract income | £126,500.00 | £126,500.00 |
| Estimated income tax | £32,600.83 | £0.00 |
| Employee National Insurance | £4,182.89 | £0.00 |
| Employer-related deductions | £16,085.28 | £1,135.50 |
| Corporation tax | £0.00 | £25,345.54 |
| Dividend tax | £0.00 | £20,586.75 |
| Pension deduction | £0.00 | £0.00 |
| Estimated net income | £71,830.99 | £76,432.21 |
Assumptions shown in this estimate
Inside IR35 uses the configured umbrella annual margin, employer National Insurance, apprenticeship levy, PAYE tax, employee National Insurance, pension, student loan, and selected tax year. Outside IR35 uses a GBP 12,570 salary assumption, configured corporation tax, dividend allowance and dividend rates.
FAQ
Is outside IR35 always better?
No. Net pay is only one factor. IR35 status, administration, insurance, accounting, commercial risk, and compliance obligations matter.
Does this include VAT?
No. VAT is excluded because it depends on registration status, flat-rate eligibility, invoicing, and recoverable input VAT.
Related tools
Inside IR35 Calculator, Outside IR35 Calculator, Umbrella vs Limited Company Calculator, and Contractor Take-Home Pay Calculator.
Disclaimer
Results are estimates and are not tax, financial, legal, employment, or payroll advice. Verify assumptions with a qualified adviser.