IR35 & Contracting
Umbrella vs Limited Company Calculator
Compare annual take-home, tax deductions, pension, costs, and retention without declaring either route universally better.
Difference, limited minus umbrella
£4,601.21
6.41%. Tax year 2026/27.
| Item | Umbrella | Limited company |
|---|---|---|
| Gross contract revenue | £126,500.00 | £126,500.00 |
| Umbrella or business costs | £1,800.00 | £3,000.00 |
| Income tax | £32,600.83 | £0.00 |
| National Insurance | £19,725.10 | £1,135.50 |
| Corporation tax | £0.00 | £25,345.54 |
| Dividend tax | £0.00 | £20,586.75 |
| Pension | £0.00 | £0.00 |
| Estimated annual take-home | £71,830.99 | £76,432.21 |
| Estimated monthly take-home | £5,985.92 | £6,369.35 |
| Retention percentage | 56.78% | 60.42% |
Assumptions, benefits, risks, and limits
Umbrella employment is typically simpler administratively but the assignment rate funds margin and employment costs before PAYE. A limited company can offer more control and business expense treatment, but it brings accounts, corporation tax, dividend planning, insurance, Companies House duties, and IR35 compliance obligations.
FAQ
Does this cover every administrative difference?
No. It summarizes the main tax flows and explains non-tax factors that should be reviewed before choosing a structure.
Can an inside-IR35 role use a limited company?
Sometimes, but the tax treatment can resemble PAYE. Check the status determination and fee-payer arrangements.
Related tools
Umbrella Company Take-Home Pay Calculator, Outside IR35 Calculator, and Contractor Day Rate Calculator.
Disclaimer
Results are estimates and are not tax, accounting, legal, employment, or financial advice.