Off-payroll working (IR35) calculator, 2026/27
For contractors and the fee-payers who engage them, this calculator estimates the extra tax and National Insurance that applies when a contract is determined to be inside the off-payroll working rules, compared with genuine outside-IR35 trading.
The off-payroll working (ir35) calculator runs on the rates and thresholds HMRC has published for the 2026/27 tax year, so the figures you see reflect the position your company is actually filing on rather than a historic set of bands. Change any input and the result recalculates immediately, with no sign-up and nothing sent anywhere.
If you are a director of a UK limited company, use it as a first look before a decision rather than as the decision itself. Uses 2026/27 PAYE income tax bands and employee/employer National Insurance rates to model the deemed payment. Real company positions bring in other income, reliefs, group structures and prior year adjustments that a single page of inputs cannot see, which is why the workings are written out below under contractor, ir35 & umbrella. Read those, then check the numbers against your own accounts, and speak to us if anything looks materially different from what you expected.
Last reviewed 12 September 2026 for the 2026/27 tax year. Reviewed by Waqas Sagar, Member of ICAEW, Fellow of ACCA, Fellow of AAT.
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Result, 2026/27
Estimated take-home if inside IR35
Estimated take-home if outside IR35 (via limited company)
Estimated cost of being inside IR35
Deemed employer's National Insurance
Usually deducted by the fee-payer before paying youIllustration only, figures are based on the rates you have selected and the information entered. Please check your own position with us before acting.
Estimates for the 2026/27 tax year using published GOV.UK rates. Switch between 2026/27 and 2025/26 above.
How this is calculated
Where the off-payroll working rules apply, the fee-payer (usually the agency or end client) must calculate a 'deemed direct payment', broadly the contract fee less any VAT and allowable expenses, then deduct employer's National Insurance before applying PAYE income tax and employee National Insurance to what remains, exactly as if you were an employee.
This calculator applies the current employer secondary threshold and rate to work out employer NI, then taxes the balance through the standard personal allowance, basic and higher rate income tax bands, and the primary and upper NI thresholds.
The outside-IR35 comparison assumes a small salary near the NI primary threshold with the balance drawn as dividends after corporation tax, which is the typical structure for a genuinely self-employed limited company contractor.
Why status determination matters so much
The off-payroll working rules (commonly called IR35) were reformed in April 2017 for the public sector and April 2021 for medium and large private sector clients, shifting responsibility for determining employment status from the contractor to the end client. A wrong determination can leave the fee-payer liable for unpaid tax and NI.
Small company clients, broadly meeting two of: turnover under £10.2 million, balance sheet under £5.1 million, fewer than 50 employees, are exempt from making the determination, leaving the contractor's own company responsible for applying the rules under the older regime.
What contractors and clients can do
A written Status Determination Statement (SDS) using HMRC's Check Employment Status for Tax (CEST) tool or independent review is standard practice, and should reflect the actual working practices, not just the contract wording.
If you disagree with a determination, there is a client-led status disagreement process; if a contract remains genuinely outside IR35, keeping evidence of substitution rights, control and lack of mutuality of obligation is essential.
What this means for your company
Treat the result as a planning figure for the 2026/27 tax year. If it changes what you were about to do, take a director's salary, a dividend, a large asset purchase or a filing decision, check it against your own accounts first. We can review the position with you and confirm the tax treatment before you commit.
Frequently asked questions
Who decides if I am inside or outside IR35?
For medium and large private sector clients and all public sector clients, the end client must determine your status and issue a Status Determination Statement. For small private sector clients, your own limited company remains responsible for the determination.
Who deducts the tax if I am inside IR35?
The fee-payer, typically the agency paying your limited company or you directly, deducts income tax and employee National Insurance through payroll and also pays employer's National Insurance, which reduces the amount available to pay you.
Can I claim expenses if I am inside IR35?
Generally only a limited range of expenses, mainly travel and subsistence in some cases, and the 5% notional deduction is no longer available for medium and large client engagements, only where the small companies exemption applies.
Does being inside IR35 mean I am an employee?
No. It means your fees are taxed similarly to employment for that specific engagement, but you do not gain employment rights such as holiday pay, sick pay or protection from unfair dismissal from the fee-payer or end client.
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