2026/27 · Inside IR35 · Umbrella Model
Inside IR35 Take-Home Calculator 2026/27
Most IR35 calculators show you a number. This one shows you the full journey — every pound deducted from your assignment rate, split into employer costs taken before your payslip and employee deductions taken from your gross pay, down to the amount that lands in your account.
Contract Details
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Group 1 — Employer Costs
These are deducted from your assignment rate before deemed salary is calculated. Employer's NI (15%) and Apprenticeship Levy (0.5%) are statutory and always apply.
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Group 2 — Employee Deductions
Calculated from your deemed salary. Employee's NI and Income Tax are always applied. Pension uses relief at source — HMRC adds 20% tax relief into your pot.
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Both percentages are calculated on your deemed salary — not your gross assignment rate. Deemed salary is lower, so the actual £ contribution will be less than applying the same % to your day rate.
Total going into pension/yr
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Your actual pension cost/yr
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Assignment Rate
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gross contract value
Group 1 Total
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employer-side costs
Group 2 Total
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employee deductions
Net Take-Home
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in your bank account
ItemRateDailyWeeklyMonthlyAnnual
⚠ Disclaimer — The figures on this page are estimates only. Tax legislation is complex and your personal circumstances may affect the actual amounts deducted. These calculations should not be relied upon as financial or tax advice. Always verify your take-home pay and deductions with a qualified accountant or tax adviser before making any financial decisions.
Pension Method Comparison
| Feature | Relief at Source | Salary Sacrifice |
|---|---|---|
| Where pension is deducted | Group 2 — from your net pay | Group 1 — exchanged before NI/tax |
| NI savings | None — NI calculated on full deemed salary | Yes — both employer and employee NI saved on sacrificed amount |
| Tax relief | HMRC adds 20% into pot; higher rate via SA | Automatic — contribution is pre-tax |
| Self Assessment needed? | Yes, for higher/additional rate relief | No — full relief is automatic |
| Availability | Standard with most umbrella companies | Less common — check with your umbrella |
| Impact on deemed salary | No change to deemed salary | Deemed salary is reduced (lower payslip gross) |
| State pension / benefits | No impact — NI paid on full salary | Reduced NI record if salary falls below thresholds |
| Feature | Rolled Up | Accrued |
|---|---|---|
| How you receive it | Added to each payslip (12.07% uplift) | Withheld and paid when you take leave |
| Annual total | Same | Same |
| Pay during holiday weeks | No — you've already been paid it | Yes — paid from your accrued pot |
| Cash flow | Higher regular payslips, nothing during leave | Lower regular payslips, paid during leave |
| Best for | Contractors who prefer maximum cash flow now | Contractors who want guaranteed pay during holidays |
Frequently Asked Questions
What is deemed salary inside IR35?
Deemed salary is the gross payslip figure that remains after all employer-side costs (umbrella fee, Apprenticeship Levy at 0.5%, Employer's NI at 15%, and employer pension) are deducted from your assignment rate. It is the starting point for employee deductions like income tax, Employee's NI, and pension contributions. Unlike standard employment where employer costs sit on top of your salary, inside IR35 they are carved from money that was nominally your day rate. If you're working outside IR35 through a limited company, see our LTD company expenses guide instead.
How much of my day rate do I actually take home inside IR35?
For a typical £500/day contractor working 46 weeks per year, the effective deduction rate is roughly 45–55% of the gross assignment rate, depending on pension contributions and tax code. The main costs are Employer's NI (15% above £5,000), Employee's NI (8% from £12,570 to £50,270, then 2%), and income tax (20–45%). Use the calculator above for an exact figure based on your personal circumstances.
What is the difference between salary sacrifice and relief at source for pension?
Relief at source deducts pension from your net pay, then HMRC adds 20% basic rate relief into the pot. Higher rate taxpayers can claim extra relief via Self Assessment. Salary sacrifice exchanges part of your gross salary for an employer pension contribution before NI is calculated, saving both employer and employee NI on the sacrificed amount. Salary sacrifice is more tax-efficient overall but is less commonly offered by umbrella companies.
How does holiday pay work inside IR35 via an umbrella?
Umbrella companies must provide statutory holiday pay at 12.07% of gross pay, derived from 5.6 weeks of statutory leave divided by 46.4 working weeks. This can be rolled up (included in each payslip, with no pay during leave) or accrued (withheld from payslips and paid out when you take holiday or leave the umbrella). The annual total is identical either way — only the cash flow timing differs.
Why does my personal allowance reduce above £100,000?
HMRC reduces the £12,570 personal allowance by £1 for every £2 earned above £100,000. This creates an effective 60% marginal tax rate between £100,000 and £125,140. At £125,140 and above, the personal allowance is completely eliminated. This affects many inside IR35 contractors on day rates above approximately £400/day and is one of the reasons the "real" cost of IR35 can be surprisingly high at certain day rates.
What is the Apprenticeship Levy and why do I pay it inside IR35?
The Apprenticeship Levy is 0.5% of the payroll bill. While employers normally receive a £15,000 annual allowance to offset it, this allowance belongs to the umbrella company — not to individual workers. As a result, the full 0.5% is deducted from your assignment rate. It is a statutory cost that always applies when working inside IR35 via an umbrella, though it is typically the smallest of the Group 1 deductions.
Can I claim additional pension tax relief via Self Assessment?
Yes, if you use relief at source (the default). Basic rate (20%) relief is added automatically by HMRC into your pension pot. If you are a higher rate (40%) or additional rate (45%) taxpayer, you can claim the extra 20% or 25% respectively via your Self Assessment tax return. This comes back as a reduction in your tax bill, not as additional money in the pension pot. If you use salary sacrifice instead, full tax relief is automatic and no Self Assessment claim is needed.
What are the 2026/27 Employer's NI rates for umbrella contractors?
For 2026/27, Employer's National Insurance remains at 15% on earnings above the secondary threshold of £5,000 per year — unchanged from 2025/26. Employer's NI is the single largest deduction for most inside IR35 contractors and is deducted from the assignment rate before deemed salary is calculated — meaning it directly reduces your gross payslip figure.