Our IR35 Calculator is an essential tool designed specifically for contractors and freelancers working in the UK. It provides a clear and accurate assessment of the financial impact the IR35 legislation can have on your net income. Introduced as part of the UK’s efforts to prevent tax avoidance by individuals working as disguised employees, IR35 can significantly alter how much tax you owe if your contract is deemed to be inside its scope.
Our calculator simplifies this complex issue by estimating how much additional tax you might pay under IR35, compared to operating outside of it. In just a few minutes, you’ll receive a detailed breakdown of your take-home pay under both scenarios.
1. Select Your Rate Type
Choose whether you’re paid daily or hourly. The calculator will multiply this rate by a typical working year to estimate your annual contracting income.
2. Enter Your Income Details
The calculator quickly determines your projected take-home pay and total tax for both inside and outside IR35 scenarios. You’ll see breakdowns for personal tax, employer’s NIC, corporation tax (if outside), plus estimated net annual and monthly income.
Inside IR35
This calculation takes into account the PAYE income tax, National Insurance contributions, and other deductions typical for an employee. If your contract is considered inside IR35, you’ll see exactly how this affects your net pay.
Outside IR35
In this scenario, the calculator reflects the standard tax regime for contractors operating through their own limited company, factoring in corporation tax and dividend taxation. You’ll see a potential higher net income—assuming a genuine outside-IR35 working arrangement.
Compare Inside vs. Outside IR35 Income
By inputting details such as your contract rate, annual expenses, pension contributions, and salary, our calculator provides a side-by-side comparison, allowing you to clearly see the financial impact of being inside IR35 versus operating outside IR35. It highlights the difference in your take-home pay under each scenario.
Understand precisely how much IR35 might cost you, enabling informed decisions on contract negotiations or financial planning.
See at a glance how your annual income could change if your contract falls within IR35, so you can budget and set aside funds accordingly.
Armed with accurate figures, contractors can negotiate higher rates to offset any additional tax burden associated with IR35.
A straightforward interface delivers a detailed breakdown of your potential liabilities in just a few clicks—no cumbersome spreadsheets required.
Gain a clear picture of how IR35 affects your bottom line, helping you plan your take-home pay and set the right contract rates.
Understand the cost implications when hiring contractors, ensuring everyone is aware of how IR35 may influence pay rates and overheads.
Provide clients with a quick reference to illustrate the financial implications of IR35, guiding them toward more thorough status reviews when needed.
Using our IR35 Calculator takes just a few minutes but could save you from unexpected costs down the line. With a clear inside vs. outside IR35 comparison, you’ll know exactly where you stand—and what steps to consider next.
The IR35 Calculator is more than a simple tax tool—it’s a strategic resource for anyone working on or negotiating contracts in the UK’s flexible labour market. By highlighting the potential net income differences between inside and outside IR35, you can proactively address tax risks, secure appropriate contract terms, and stay compliant.
Staying informed and prepared is crucial in an ever-evolving regulatory environment. With our IR35 Calculator, you’ll navigate IR35 more confidently, knowing the precise financial impact on your contracting earnings—and safeguard your financial well-being as you focus on doing what you do best.
Estimates Only:
This tool shows indicative figures based on the inputs you provide and assumed working patterns. Actual tax liabilities may vary with changing expenses, income levels, or legislative updates.
Not Formal Advice:
IR35 determination is nuanced. Always consult a qualified accountant, tax advisor, or specialist if you have concerns about compliance or contract wording.
Keep Up-to-Date:
Rates and thresholds for National Insurance, corporation tax, and income tax may change each tax year. Ensure the calculator or your inputs reflect current HMRC guidelines.