IR35 inside vs outside, 2026/27: what the same day rate really pays

IR35: what does your day rate really pay inside and outside?

Enter your day rate. You get the take-home outside IR35 through your own company, the take-home inside IR35 through an umbrella, and the day rate you would need inside IR35 to keep the same money.

England, Wales and Northern Ireland rates for 2026/27. Not tax advice. Confirm rates on GOV.UK. Scottish bands, student loans, pension contributions, VAT and holiday pay are not modelled. This page does not decide your IR35 status.

Day rate outside IR35 (£)

Days invoiced a year

Yearly business expenses outside IR35 (£)

Yearly company running costs (£)

Umbrella fee a week (£)

Day rate offered inside IR35 (£, optional)

Employment Allowance available

Keep a State Pension qualifying year

What you keep

Line	Outside IR35	Inside IR35

Across day rates (same settings)

Day rate	Outside keeps	Inside keeps	Gap	Inside rate to match

Summary to copy

How it is worked out

Outside IR35: your company invoices day rate times days, pays expenses and running costs, then a director salary (the best one is found by trying salaries in £100 steps), employer National Insurance at 15% above £5,000, corporation tax at 19% to £50,000 rising to 25% from £250,000, and dividends taxed at 10.75% / 35.75% / 39.35% after a £500 allowance. Inside IR35: the invoice less the umbrella fee must cover your gross pay and the 15% employer National Insurance on it; you then pay income tax and employee National Insurance (8% to £50,270, 2% above) on the gross pay. Not decided here: your IR35 status, Scottish bands, student loans, pension contributions, VAT, holiday and sick pay, apprenticeship levy, and travel and subsistence rules.

Common questions

What does inside IR35 mean for take-home pay?

Inside IR35 you are treated as an employee for tax: employer National Insurance of 15% above £5,000 is taken out of what the client pays, then income tax and employee National Insurance come out of your pay. You lose the dividend route and most expense claims, so the same day rate leaves you with much less than outside IR35.

What day rate do I need inside IR35 to match my outside-IR35 take-home?

Enter your outside rate and the calculator finds the inside-IR35 day rate that gives the same take-home. For a typical contractor it is well above the outside rate, before counting the holiday pay, sick pay and pension an employment-like contract can add.

How is the best outside-IR35 salary chosen?

The calculator tries director salaries in steps and keeps the one that leaves you the most after employer National Insurance, corporation tax, income tax and dividend tax at 2026/27 rates, keeping a State Pension qualifying year by default.

Does this decide whether I am inside or outside IR35?

No. Status depends on the facts of the engagement. HMRC provides a CEST tool, and a specialist can review a contract. This page only shows what each answer is worth to you.

Is this tax advice?

No. It is an estimate from published 2026/27 rates for England, Wales and Northern Ireland. Scottish bands, student loans, pension contributions, VAT and holiday pay are not modelled. Confirm figures on GOV.UK or with an accountant.