How to use the contractor day rate calculator
- 1 Enter your day rate and the days you work a year.
- 2 Choose to compare, or show only outside or inside IR35.
- 3 Enter your director's salary and business expenses for the outside IR35 figures.
- 4 Enter the umbrella margin for the inside IR35 figures, then compare the take-home.
Worked example
£450 a day for 220 days, which is £99,000 a year. Outside IR35, with a £12,570 salary and £2,500 of expenses, the company pays £18,190.54 Corporation Tax and £64,603.96 in dividends; after £13,617.16 dividend tax you keep about £63,557. Inside IR35 with a £20 weekly margin, the gross pay is £85,601.73 and take-home about £60,206, which is £3,350 less.
Getting the most from a day rate
- Know your status: the client's status determination decides inside or outside.
- Negotiate inside rates up: use the break-even figure.
- Keep profit in the company or use pension contributions to lower tax.
- Claim proper expenses outside IR35, such as equipment and accountancy.
See umbrella pay in detail with the Umbrella Company Calculator, and plan a director's pay with the Salary vs Dividend Calculator.
Features
Side-by-side comparison
Outside and inside IR35 take-home from one day rate.
2026/27 rules
Dividend tax of 10.75% and 35.75%, Corporation Tax marginal relief and 15% employer NI.
Break-even rate
Shows the inside day rate that would match your outside take-home.
When to use it
Negotiating a new contract
See how much higher an inside IR35 rate must be to match an outside one. For umbrella detail, use the Umbrella Company Calculator.
Status changes
Check what happens to your pay if a client decides a role is inside IR35.
Salary and dividend planning
Test different director salaries. For more detail, see the Salary vs Dividend Calculator.
Leaving permanent work
Compare contracting with a salaried job using the Take-Home Pay Calculator.
Related Pay and Salary tasks
Frequently asked questions
What is IR35?
IR35 is the set of off-payroll working rules. If a contract would be employment were it not for your limited company, it is inside IR35 and you are taxed much like an employee. Medium and large clients decide the status; for small clients, your own company decides.
Why is take-home lower inside IR35?
Inside IR35 the fee pays employer National Insurance and the Apprenticeship Levy as well as your income tax and employee National Insurance, and you cannot pay yourself in dividends.
What dividend tax rates apply in 2026/27?
10.75% in the basic rate band, 35.75% in the higher rate band and 39.35% in the additional rate band, after the £500 dividend allowance. The basic and higher rates rose by 2 points from April 2026.
Why use a £12,570 salary?
It uses the personal allowance without income tax. For a single-director company it costs some employer National Insurance above £5,000, but the salary and that cost are deductible for Corporation Tax. Many directors use this level; an accountant can advise on yours.
Does the calculator take out all profit as dividends?
Yes, to show the maximum take-home. Leaving profit in the company, or paying into a pension, lowers personal tax now.
What Corporation Tax rate applies?
19% on profits up to £50,000, 25% above £250,000, with marginal relief in between, giving an effective rate of 26.5% on profit in that band.
Can I claim expenses inside IR35?
Very few. Travel to a client site is normally not allowed inside IR35, while outside IR35 your company can claim legitimate business costs.
Is the figure exact?
It is an estimate for one tax year in England, Wales and Northern Ireland, with no pension, student loan or other income. Your accountant or umbrella payslip will show the exact amounts.
What is a good day rate inside IR35?
Use the break-even figure: it shows roughly how much higher an inside rate must be to give the same take-home as your outside rate.
Results are estimates based on the official rates linked above. Confirm important figures with the issuing authority or a qualified adviser before you act on them.
Built and reviewed by Hamza Farooq, founder and lead developer
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