Day rate calculator worked example
This IR35 calculator uses a £500 day rate, 5 days a week and 46 weeks (230 days, £115,000). Inside IR35 take-home is £68,065.66. Outside IR35, through a limited company salary of £12,570 and a dividend, take-home is £72,293.19.
Inside IR35 follows the same sum as the umbrella take-home calculator. The assignment, minus the weekly margin and the 0.5% apprenticeship levy, is split between gross pay and employer National Insurance at 15% above £5,000. Holiday pay is 5.6/52 of that gross. It is part of the salary, not a second deduction, so the annual take-home does not fall when the box is ticked. Untick it to hide the line. The umbrella page address is unchanged.
Outside IR35, the company pays the salary and the employer National Insurance on it, then corporation tax on the rest. What remains is paid as a dividend. The default salary is the £12,570 Personal Allowance, so the salary itself has no income tax and no employee National Insurance. Employer National Insurance is still due above £5,000. A salary of £5,000 avoids that employer National Insurance. On this contract it leaves £71,540.52, which is less than the £12,570 salary. Employment Allowance is not deducted: a company whose only employee is a director paid above £5,000 cannot claim it.
2026/27 rates used
| Item | 2026/27 |
|---|---|
| Employer National Insurance | 15% above £5,000 |
| Apprenticeship levy | 0.5% of the assignment, inside IR35 only |
| Dividend allowance | £500 |
| Dividend rates | 10.75%, 35.75%, 39.35% |
| Corporation Tax | 19% under £50,000, 25% over £250,000, fraction 3/200 between |
Dividend rates are from GOV.UK tax on dividends for 6 April 2026 to 5 April 2027. Corporation Tax rates and the 3/200 fraction are from GOV.UK corporation tax rates, covering the financial years starting 1 April 2026 and 1 April 2027. The marginal-relief sum assumes a 12-month period, no associated companies and no exempt distributions. This page does not decide whether IR35 applies.
Frequently asked questions
How does an IR35 calculator compare inside and outside?
Inside IR35 the day rate is paid to an umbrella. Employer National Insurance at 15% above £5,000, the apprenticeship levy and the umbrella margin come off before your salary. Outside IR35 a limited company pays corporation tax on profit after a salary, then you take a dividend.
What is the day rate calculator assumption for 2026/27?
A £500 day rate for 5 days a week and 46 weeks is £115,000. Inside IR35, with a £25 weekly margin and the levy, take-home is £68,065.66. Outside IR35, with a £12,570 salary, take-home is £72,293.19. This is an illustration, not advice on your IR35 status.
What dividend and corporation tax rates apply in 2026/27?
The dividend allowance is £500. Dividend rates above it are 10.75%, 35.75% and 39.35%. Corporation Tax is 19% under £50,000 and 25% over £250,000, with marginal relief in between. The comparison assumes one company, no associated companies and no exempt distributions.