UK Contractor Take-Home Calculator
Turn your day rate into an estimated annual take-home for the 2025/26 UK tax year. Compare outside IR35 (limited company: salary plus dividends) with inside IR35 (PAYE), for England/Wales/Northern Ireland or Scotland.
From day rate to take-home
Your day rate is not your take-home. What you actually keep depends on how many days you bill, your costs, your IR35 status, and where in the UK you pay tax. This calculator turns a day rate and a number of billable days into an estimated annual take-home for the 2025/26 tax year.
Outside IR35: salary plus dividends
Working outside IR35 through your own limited company, the tax-efficient approach is a small director's salary - commonly £12,570, which sits at both the Personal Allowance and the National Insurance Primary Threshold, so it carries no Income Tax and no employee NI - plus dividends drawn from profit after Corporation Tax. Corporation Tax is 19% on profits up to £50,000, 25% above £250,000, and tapered by Marginal Relief in between. Dividends are then taxed at 8.75% / 33.75% / 39.35% for 2025/26 after a £500 dividend allowance.
Inside IR35: taxed like employment
Inside IR35, the engagement is treated as employment: Income Tax and employee National Insurance come off through PAYE, and the salary-plus- dividends structure is not available. Take-home is materially lower, which is why contractors often seek a higher day rate for inside-IR35 work. The assignment rate also has to cover employer NI before your gross pay (the calculator deducts this); it excludes any umbrella margin and the apprenticeship levy.
England/Wales/NI vs Scotland
Scotland sets its own income tax bands - six of them for 2025/26, from a 19% starter rate up to a 48% top rate - which apply to salary and other non-dividend income. Dividend tax rates are the same across the UK. The Personal Allowance (£12,570, tapered away above £100,000) is UK-wide.
Heads-up for 2026/27: dividend tax rates rise from 6 April 2026 (basic to 10.75%, higher to 35.75%), so a limited-company contractor's take-home will fall slightly next tax year.
Frequently asked questions
How is contractor take-home calculated outside IR35? +
Outside IR35, you typically run a limited company: the company pays you a small tax-efficient salary (often £12,570, at the Personal Allowance and NI threshold), deducts allowable expenses and pension, and pays Corporation Tax on the remaining profit. You then draw the post-tax profit as dividends, taxed at dividend rates (8.75%/33.75%/39.35% for 2025/26) after a £500 dividend allowance. This calculator models that salary-plus-dividends approach.
How does inside IR35 reduce take-home? +
Inside IR35, your engagement is taxed like employment: Income Tax and employee National Insurance are deducted via PAYE, and you cannot use the low-salary-plus-dividends structure. The assignment rate also has to cover employer NI before your gross pay, which this calculator deducts. That usually means a meaningfully lower take-home than outside IR35 - often a 15-25% higher day rate is needed to match. The estimate excludes any umbrella margin and the apprenticeship levy.
Does it work for Scotland? +
Yes. Scotland sets its own income tax bands (six bands for 2025/26, from a 19% starter rate to a 48% top rate), which apply to your salary and other non-dividend income. Dividend tax rates are the same UK-wide. Switch 'Where you pay tax' to Scotland to use the Scottish bands.