Compare your take-home pay inside vs outside IR35 — and see the real annual cost of an IR35 determination as a UK contractor.
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How This Works
Inside IR35: the contract value is treated as employment income. 5% expenses allowance applies. Income tax and NI are deducted at employment rates, plus employer NI (13.8%). Outside IR35: the contractor operates via a limited company, taking a small salary (at personal allowance) and extracting remaining profits as dividends taxed at lower rates (8.75% basic, 33.75% higher).
IR35 status is determined by three key tests: Substitution (can you send a substitute to do the work?), Control (does the client dictate how/when/where you work?), and Mutuality of Obligation (is the client obliged to offer work and you obliged to accept?). If you cannot substitute, have significant client control, and have ongoing obligation to work, you are likely inside IR35. Use the CEST tool on GOV.UK for initial assessment, then seek specialist advice for borderline cases.