UK PAYE & IR35 Contractor Salary Sizer
Model Inside vs. Outside IR35 take-home pay under HMRC rules. Compare Corporation Tax (19%–25%), dividend tax bands, and director salary splits against umbrella PAYE deductions, calculate the exact rate uplift needed for parity, and evaluate permanent salary equivalents.
1. Contract Rate & Schedule
Outside IR35 (PSC / Ltd)
Inside IR35 (Umbrella PAYE)
Inside IR35 Rate Uplift Negotiator
What day rate must you quote a recruiter to equal your Outside IR35 take-home?
Line-by-Line Statutory Tax Comparison
| Remuneration Line Item | Outside IR35 (PSC) | Inside IR35 (Umbrella) | Variance & Impact |
|---|---|---|---|
| Gross Invoiced Revenue | £121,000 | £121,000 | Parity starting baseline |
| Operating / Agency Costs | -£3,600 | -£1,100 | PSC expenses vs. umbrella margin |
| Employer National Insurance | -£1,136 | -£14,919 | Deducted from umbrella assignment rate |
| Apprenticeship Levy (0.5%) | £0 | -£522 | Only applies to large umbrella payrolls |
| Corporation Tax (19%–25%) | -£23,729 | £0 | PSC corporate profit tax |
| PAYE Income Tax & Dividends | -£17,520 | -£30,107 | Dividend rates vs. PAYE wage tax |
| Employee National Insurance | -£0 | -£4,100 | 8% basic / 2% higher rate |
| TOTAL NET TAKE-HOME | £75,016 | £70,252 | +£4,764 Outside |
Automating client time tracking summaries, contract payment chase sequences, and weekly PDF invoice delivery? Connect SadaSend to your AI agents via native MCP for human-in-the-loop outbound communications.
Specialist UK contractor mortgages based on contract day rate, IR35 legal defense, and professional indemnity coverage.
Comparing US entity compensation, reasonable director wages, or 50-state tax withholding?
Open S-Corp Reasonable Salary Sizer →How to use this tool
Enter day rate and billable weeks
Input your contract day rate (or hourly rate) and billable working weeks per year (typically 44 weeks / 220 days allowing for holidays and sick leave).
Configure Outside IR35 company deductions
Set your tax-efficient director salary (typically £12,570), allowable business expenses (accountancy, software, insurance), and pre-tax company pension contributions.
Review Corporation Tax and dividend splits
The model applies standard HMRC Corporation Tax tiers (19% small profits rate, 25% main rate, and marginal relief) and calculates dividend tax across Basic (8.75%), Higher (33.75%), and Additional (39.35%) bands.
Model Inside IR35 umbrella deductions
Deduct Employer NI (13.8% or 15.0%), Apprenticeship Levy (0.5%), and umbrella margins from assignment gross to establish employee taxable pay, Employee NI, and PAYE tax.
Compare contractor retention against permanent salary
Compare Outside vs. Inside IR35 net cash in hand, determine the required inside rate uplift for parity, and evaluate the equivalent permanent PAYE salary.
Export contractor remuneration statement
Download an institutional 1-page A4 vector PDF remuneration statement or Excel-compatible CSV for rate negotiation with recruiters and clients.
Frequently Asked Questions
What is the key difference between Inside IR35 and Outside IR35 take-home pay?
Outside IR35 contracts allow you to operate via your own Personal Service Company (PSC / Limited Company). You pay Corporation Tax (19% to 25%) on company profits, take a tax-efficient director salary (typically £12,570), and extract profits as dividends (taxed at 8.75%, 33.75%, or 39.35%). Inside IR35 assignments treat you as an employee for tax purposes: your umbrella company deducts Employer NI (13.8% or 15%), the 0.5% Apprenticeship Levy, and umbrella fees from your assignment rate before deducting Employee NI (8%/2%) and PAYE Income Tax, resulting in roughly 15% to 25% lower take-home pay at identical day rates.
How much rate uplift should I negotiate if a contract flips from Outside to Inside IR35?
To match the same net take-home pay as an Outside IR35 contract, contractors typically require a 20% to 28% day rate uplift. For example, a £550/day Outside IR35 contract yields approximately £75,000 net annually; to achieve that same £75,000 net take-home through an Inside IR35 umbrella company, you would need to negotiate an assignment rate of approximately £680 to £690/day.
How does the HMRC personal allowance taper affect contractors earning over £100,000?
For total personal income exceeding £100,000 (combining salary and dividends), HMRC reduces the standard £12,570 Personal Allowance by £1 for every £2 earned above £100,000. This creates an effective 60% marginal income tax trap (or 67.5% effective rate on dividends in that band) between £100,000 and £125,140, where the Personal Allowance is completely wiped out. Contractors frequently mitigate this by making pre-tax employer pension contributions directly from company revenue.
Are my day rates, tax calculations, and contract details stored on your server?
No, 100%. All IR35 tax engine calculations, corporation tax band splits, PAYE income tax formulas, vector PDF generation, and CSV exports occur entirely inside your browser using client-side JavaScript. Zero contract values, day rates, or client information are ever transmitted or stored remotely.
Related Free Engineering & Business Utilities
All tools operate 100% in your browser. No files or confidential business data are ever uploaded.
SadaSend — High-Throughput Transactional Email & Native MCP for AI Agents
Need programmatic email dispatch, human-in-the-loop approvals, or a native MCP server for your LLM agents? SadaSend provides dedicated IP pools, zero spam tolerance, and verified delivery webhooks.
Paystub & Payroll Generator
Gross-to-net paystub calculations with federal, state, and FICA tax withholding.
Bonus & Supplemental Tax Sizer
Federal 22% flat rate and 50-state supplemental tax withholding calculations.
IRS Mileage Deduction & Travel Log
Standard mileage rates (67¢ & 70¢) vs. actual expenses with contemporaneous trip logging.