Plan outside IR35 contractor income scenarios and compare day-rate income with salary, pension, mortgage, and household budget planning.
Outside IR35 contractor pay is built on different assumptions from an employee salary. Fees are invoiced by your own company, which pays Corporation Tax on its profit; you are then taxed personally on whatever you draw out, usually as a small salary plus dividends, and dividends have their own rates and their own allowance. That two-stage split is why an outside-IR35 figure cannot be read off a salary calculation.
Through a limited company: Corporation Tax, then a small salary and dividends. The inside figure is shown alongside for comparison.
Inside IR35, the £99,000 is an assignment rate, not a salary. £12,636 comes off it first as employer National Insurance, the Apprenticeship Levy and any umbrella margin — 12.76% of the headline rate — leaving £86,364 as your gross pay.
Outside IR35, the company pays £19,154 Corporation Tax, and the dividends carry £14,572 of dividend tax on top of a £12,570 salary.
This compares two tax treatments on the same contract value. It does not decide your status — that depends on how you actually work, and it is the client's determination for medium and large clients. See HMRC's CEST tool and the off-payroll working rules.
| Tax/source year | 2026/27 |
|---|---|
| Region | England/Wales/Northern Ireland |
| Tax code basis | 1257L where the page uses PAYE defaults |
| Pension basis | No pension deduction unless this example says otherwise |
| Student loan basis | No student loan unless selected in this example |
| What is not decided here | PayBreakdown does not decide payroll correctness, lender approval, benefit entitlement or employer compliance, and does not give regulated financial, mortgage, debt, tax, payroll or legal advice. |
|---|
The figures on this page are worked from outside IR35, using the values below. Open the calculator if your example salary differs.
Outside-IR35 limited-company take-home is not implemented here because salary, dividend, corporation tax, VAT, expenses and accountancy assumptions need a separate source-backed model.
Contractor outputs are scenario estimates only. PayBreakdown does not decide IR35 status, umbrella compliance, employment status, legal position, tax filing duties, or the best provider structure.
This estimate is worked out on £35,000 annual gross. Change any of those and the take-home figure moves; pension method and student loan plan usually move it most. A payslip can differ from any calculator because payroll works pay period by pay period, so a tax-code change, a bonus, arrears or a refund can land in one month and not the next. See how each deduction is worked out.
No. PayBreakdown does not decide IR35 status and does not replace CEST. Status can be contract-by-contract and may depend on contract terms and actual working practices.
Not in full. Working out what a limited company actually leaves you with means Corporation Tax on the profit first, then the split between a small salary and dividends, and then dividend tax on top — before VAT treatment, allowable expenses, pension contributions and accountancy fees are accounted for. The director salary and dividend calculator covers the salary-and-dividend part; the rest depends on your own accounts.
No. Umbrella estimates are planning estimates only. Real pay can differ because of the umbrella margin, holiday-pay treatment, pension, student loans, payroll period, expenses and provider-specific deductions.
No. It is not tax, legal, employment, accounting, payroll or financial advice. Check official GOV.UK sources, HMRC CEST, payroll, agency or professional guidance where needed.
Last updated 2026-08-27. Checked by Sean Elsmore. Rates last checked against GOV.UK on 2026-08-07. Estimates are for planning and should be checked against official records where the decision matters.