Indietax

IR35 Calculator 2026/27

Updated for the 2026/27tax year · Last updated

Enter your annual contract value to see the financial difference between inside and outside IR35. Outside IR35 assumes a limited company with a small director salary and dividends; inside IR35 treats the full contract as employment income.

Outside IR35

£59,248

take-home

Inside IR35

£56,958

take-home

Outside IR35 leaves you £2,290 better off per year.
ItemOutsideInside
Contract value£80,000£80,000
Corporation tax− £13,324—
Income tax− £4,428− £19,431
National Insurance—− £3,611
Take-home£59,248£56,958

Outside IR35 assumes salary of £12,570+ remaining profits as dividends via a limited company. This is a simplified illustration — actual figures depend on your accountant’s structure.

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How this calculator works

Outside IR35: the calculator models a director salary of £12,570 (below the NI threshold) with remaining after-tax company profits paid as dividends. Corporation tax is applied to profits at the applicable rate (19% for small companies).

Inside IR35: the full contract value is treated as employment income. Income tax and employee Class 1 NI are deducted as if you were directly employed.

Frequently asked questions

IR35 (off-payroll working rules) determines whether a contractor is treated as employed or self-employed for tax purposes. If your contract falls 'inside IR35', the fee-payer (the client or agency) must deduct income tax and NI as if you were an employee — even if you're operating through a limited company.
For public sector and medium/large private sector clients, the client (end-user) makes the Status Determination Statement (SDS). For small private sector clients, the contractor can still self-assess. HMRC's CEST tool provides an indicative determination.
Outside IR35, you can pay yourself a small salary and take remaining profits as dividends, avoiding NI on the dividend element and benefiting from the lower corporation tax rate. Inside IR35, the entire contract value is treated as employment income — subject to both income tax and employee NI. The difference is typically £5,000–£15,000/year at typical contractor day rates.
Inside IR35, you can deduct 5% of contract income to cover running costs (the 5% allowance was removed for public sector from April 2017 but remains for private sector deemed payments). Travel and subsistence between your home and a 'supervised' workplace are generally not deductible inside IR35.

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