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IR35 Comparison Tool

Compare your net take-home pay for the same day rate between Inside and Outside IR35.

Contract Details

Net Take-Home Difference

+-£1,122.59

Extra per year by being Outside IR35

Inside IR35 (Umbrella)

£4,816.67

per month net

Outside IR35 (Limited)

£4,723.12

per month net

Why is the difference so big?

Tax Efficiency: Outside IR35 allows a mix of low salary and dividends, which are taxed at lower rates than PAYE income.

NI Savings: You don't pay Employer's NI or the Apprenticeship Levy, which are typically deducted from an Umbrella gross rate.

Financial Breakdown

MetricInside IR35Outside IR35
Gross Annual Income£110,000.00£110,000.00
Taxes & Costs (Est.)PAYE / NI / LevyCorp Tax / Div Tax
Net Take-Home (Annual)£57,800.00£56,677.41
UK Tax Rules for Contractors 2025/26

IR35 & Tax — FAQ

Everything you need to know about the differences between contracting Inside and Outside IR35.

IR35 is off-payroll working legislation designed to prevent 'disguised employment'. If a role is 'Inside', it's treated as employment for tax purposes. If 'Outside', it's a true business-to-business relationship.

Inside IR35 usually requires an Umbrella company to handle PAYE, while Outside IR35 is typically managed through your own Limited Company (LTD).

Outside IR35 is significantly more tax-efficient as you can take a low salary and the rest as dividends, while avoiding Employer National Insurance.

Since April 2021, the end-client is usually responsible for determining IR35 status, unless they are a 'small' company.

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