IR35 status & take-home estimator.
A rough, illustrative comparison of take-home pay working inside vs outside IR35, based on your day rate and days worked. This is an estimate for general guidance only, not personalised tax advice — your actual position may differ based on your full circumstances, and Buzz can help with a proper IR35 status assessment.
Enter your contract details
Enter your day rate and days worked, then click Calculate to see an illustrative comparison.
Rates used in this calculator (2026/27 tax year)
| Income Tax band | Rate |
|---|---|
| Up to £12,570 (personal allowance) | 0% |
| £12,571 – £50,270 | 20% |
| £50,271 – £125,140 | 40% |
| Over £125,140 | 45% |
| Employee National Insurance (Class 1) | Rate |
|---|---|
| Up to £12,570 | 0% |
| £12,571 – £50,270 | 8% |
| Over £50,270 | 2% |
| Corporation Tax (own company profit, outside scenario) | Rate |
|---|---|
| Profits up to £50,000 | 19% |
| Profits £50,000 – £250,000 | 25% less marginal relief |
| Profits over £250,000 | 25% |
Dividend allowance £500, then 10.75% / 35.75% / 39.35% depending on band. Source: gov.uk Income Tax, National Insurance, dividend and Corporation Tax rates pages, checked July 2026.
IR35 status is a judgement call, not a calculation
Getting it wrong in either direction is costly — paying more tax than you need to, or facing a bill from HMRC later. Buzz can review your actual contract and working practices and give you a proper assessment, not just an estimate. This is an estimate for general guidance only, not personalised tax advice — talk to Buzz for advice specific to your situation.
What each side of the comparison assumes
Inside IR35. The whole contract value is treated as employment income and taxed through PAYE — Income Tax in bands, plus employee National Insurance at 8% and then 2%. No business costs are deducted.
Outside IR35. The money arrives in your own limited company. The calculator assumes a £12,570 salary, Corporation Tax on what is left, and the remaining profit taken as dividends taxed at 10.75%, 35.75% or 39.35% depending on band. Two layers of tax, not one.
What is left out of the inside figure. Employer's National Insurance and the Apprenticeship Levy, and any umbrella company margin. In practice these are usually deducted from the assignment rate before you are paid, so a real inside-IR35 take-home is lower than the figure shown here. Compare an inside rate with an outside rate honestly: they are rarely the same number.
What is left out of the outside figure. Legitimate business expenses, accountancy fees, the VAT Flat Rate Scheme if you use it, pension contributions made by the company, and the fact that profit left in the company is not taxed personally until you take it out.
£500 a day, 220 days
That is £110,000 of contract income for the year.
- Inside IR35 — Income Tax £33,432 and NI £4,211£72,357 take-home
- Outside IR35 — Corporation Tax £22,069, then dividend tax £17,464£70,467 take-home
That result surprises people, so it is worth being clear about why. At this level the outside route pays Corporation Tax first and dividend tax second, and current dividend rates have narrowed the gap that used to make incorporation obviously worthwhile. Meanwhile the inside figure here ignores employer's National Insurance and any umbrella margin, which in the real world come out of that £500 day rate before you see it — often enough to reverse the comparison again.
The honest conclusion: at these rates the two are close, and the difference is not large enough to drive a status decision on its own. What does drive it is the working arrangement itself — and getting that wrong is expensive in a way that a few thousand pounds of tax efficiency is not.
Common questions about IR35
Does this tell me whether I am inside or outside IR35?
No, and no calculator can. Status depends on the reality of the engagement: control over how, when and where you work; whether you can genuinely send a substitute; mutuality of obligation; financial risk; whether you are part of the client's organisation; and how you present to the outside world. This tool only compares illustrative take-home pay under each assumption, so you can see what the difference is worth. Treat it as a financial comparison, not a determination — and be sceptical of any online tool, including HMRC's own, that claims to settle status from a questionnaire.
Who decides my status?
For engagements with medium and large private-sector clients and all public-sector clients, the end client decides and must issue a Status Determination Statement with the reasons for it. Where the client is a small private-sector business, the responsibility stays with your own company. Either way you can challenge a determination you believe is wrong, and the client must respond to a challenge within 45 days under the client-led disagreement process. Blanket determinations applied across a whole category of contractor without individual assessment do not meet the requirement to take reasonable care.
Why is my umbrella take-home lower than the inside figure shown here?
Because the assignment rate an agency quotes usually has to cover employer's National Insurance, the Apprenticeship Levy, holiday pay and the umbrella's own margin before your gross pay is calculated. So a £500 assignment rate is not £500 of gross salary. Always ask for the assignment rate and the resulting gross pay as two separate figures, and ask whether holiday pay is rolled up or retained. If an umbrella cannot give you a clear reconciliation between the two numbers, that is reason enough to use a different one.
Should I close my company if I am inside IR35?
Not necessarily, and it is a decision worth taking slowly because reopening later is not free. Many contractors run a mix of inside and outside work, and a company still makes sense where you have outside engagements, other clients, retained profit to extract efficiently over time, or expect the market to shift. Closing a company with reserves has its own tax consequences, and a members' voluntary liquidation to access capital treatment carries anti-avoidance rules if you start a similar business within two years. Park it dormant rather than closing it in haste.
What actually strengthens an outside determination?
Working practices, more than paperwork. The strongest indicators are a genuine and unfettered right of substitution that the client accepts, control over how you do the work, a specific project or deliverable rather than an open-ended role, no obligation on either side to offer or accept further work, your own equipment where practical, and real financial risk such as fixing defects at your own cost. What weakens it: line-managing the client's staff, appearing on their internal directory, fixed hours, a rolling contract with no defined output, and a written contract nobody follows.
Can Buzz review my contract?
Yes — both the written contract and, just as importantly, the actual working practices, which is where most determinations are decided. A contract with a perfect substitution clause is worth very little if the client would never accept a substitute and everyone knows it. We will tell you what we think, including when the answer is not the one you were hoping for, and what could realistically be changed at the next renewal. Get in touch before you sign rather than after the determination lands.
