Contractor take-home pay calculator
Limited company vs umbrella, side by side — see what you’d keep from your day rate outside IR35 through your own company, or inside IR35 through an umbrella, using this year’s tax rates.
Your details
| Contract income | |
| Business expenses | |
| Our accountancy fee (tax-deductible) | |
| Pension contribution | |
| Director’s salary | |
| Employer’s National Insurance | |
| Corporation tax | |
| Dividends paid to you | |
| Personal tax on dividends | |
| Income tax & employee NI on salary | |
| Take-home pay |
Umbrella company breakdown
| Contract income | |
| Umbrella margin | |
| Employer’s NI & apprenticeship levy | |
| Your gross salary | |
| Income tax (PAYE) | |
| Employee’s National Insurance | |
| Business costs — paid from taxed pay, no relief | |
| Take-home pay after costs |
Limited company assumptions: sole director outside IR35, salary set at the tax-efficient , all remaining profit paid out as dividends, no other personal income. Our monthly accountancy fee is already deducted (ex-VAT — VAT is generally reclaimable when the company is VAT-registered), just as the umbrella margin is deducted on the other side. Umbrella assumptions: same contract rate, employer’s NI and the 0.5% apprenticeship levy deducted from the assignment rate as is standard, holiday pay rolled up. The same business costs are paid either way — through the company they get tax relief; through an umbrella they come out of taxed pay (umbrella employees generally can’t claim expenses). Pension input applies to the limited company only. Both columns assume no student loan repayments; the umbrella column assumes you’ve opted out of auto-enrolment. Rates for (England & NI bands). This is an estimate for guidance — not tax advice. Talk to us for your exact position.
Limited company vs umbrella: which pays more in 2026/27?
For contracts outside IR35, a limited company almost always wins. You take a small salary, draw the rest as dividends, and every business cost — equipment, travel, software, pension contributions, even your accountancy fee — is paid before tax. Through an umbrella those same costs come out of your taxed pay with no relief at all.
For contracts inside IR35, an umbrella is usually the practical route: employer’s National Insurance (15%) and the 0.5% apprenticeship levy are deducted from your assignment rate before PAYE, which is why inside-IR35 take-home is noticeably lower at the same headline rate. If you work a mix of contracts, plenty of contractors keep their limited company for outside-IR35 work and use an umbrella only when a contract demands it.
The April 2026 dividend tax rise (up 2 percentage points at basic and higher rate) narrowed the gap — but as the calculator shows, the company route stays ahead for most full-time contractors, and pulls further ahead the more expenses and pension you put through it.
How the limited company figure is worked out
Your contract income, minus business expenses, our accountancy fee, any company pension contribution, a £12,570 director’s salary and the employer’s NI on it, leaves company profit. Corporation tax comes off (19–25% depending on profit, with marginal relief between £50k and £250k), the remainder is paid to you as dividends, and you pay dividend tax personally. The full working is shown in the breakdown above — nothing hidden.
How the umbrella figure is worked out
Your assignment income, minus the umbrella’s weekly margin, funds your employment: employer’s NI and the apprenticeship levy come off first, then income tax and employee’s NI through PAYE — and your business costs still exist, paid from taxed pay. Both columns update instantly as you change the inputs.
Take-home pay questions
How much does a contractor take home through a limited company?
How much do you take home through an umbrella company?
Is a limited company still worth it after the 2026 dividend tax rise?
What’s the difference between inside and outside IR35 take-home pay?
What salary and dividends does the calculator assume?
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