This compares an umbrella-style assignment and a simplified limited-company route from the same day rate. It is a planning comparison, not an IR35 status decision or tax filing tool.
CONTRACTOR · 2026/27
Contractor take-home comparison
Annual contract income
£110,000
- Umbrella-style take-home
- £65,809
- Limited-company extraction
- £67,696
- Corporation Tax
- £20,443
- Dividend Tax
- £15,726
- Illustrative difference
- £1,887
Compare an umbrella-style assignment with a simplified limited-company extraction — without treating company profit as personal take-home.
This compares an umbrella-style assignment and a simplified limited-company route from the same day rate. It is a planning comparison, not an IR35 status decision or tax filing tool.
A contractor on a £500 day rate over 220 days can see how umbrella deductions, company expenses, corporation tax and dividend tax change the final cash outcome. The useful insight is not just the gross contract value, but how much actually reaches the bank account after each structure takes its slice.
- IR35 status, company expenses and dividend treatment can materially change the result.
- Payroll deductions and company extraction are not the same thing, so the same day rate can produce very different take-home outcomes.
Read before relying on the result
This is an illustration, not an IR35 status assessment or accounting advice. It assumes one director/shareholder, no associated companies, no Employment Allowance, a £12,570 director salary and all distributable profit paid as dividends. Pension, VAT, student loans and retained profit are excluded.
SOURCES & REVIEW
Checked against official guidance
Last reviewed 1 September 2026 · Rule version GB-2026.27.1
Daily/weekly source monitoring. If a source changes, the affected rule set is reviewed before publication.
All source links are kept visible so you can verify the figures used on this page.
Source line: Contractor pricing assumptions are checked against GOV.UK employment-status guidance and the shared contractor rule set.
GOV.UK: Employment status ↗GOV.UK: Off-payroll working ↗Sources, methodology and update policy →Report an issue or correction →WHY RESULTS DIFFER
Why two users can see different results
Why the result can differ
Different tax codes, payroll periods, Scottish bands, pension methods or lender assumptions can change the outcome.
One-off bonuses, pay frequency, overpayments, allowances and reliefs can move the result away from a simple annual estimate.
Where a rule depends on eligibility or legal status, this page shows an estimate and links to official guidance.
This section is intentionally repeated on key tools so the explanation stays near the result instead of being hidden in a separate policy page.
COMMON QUESTIONS
Frequently asked questions
Does this determine IR35 status?
No. IR35 depends on the working arrangement and facts, not the calculator output.
Is umbrella take-home the same as limited company take-home?
No. The deductions are different and limited company profit is not the same thing as personal take-home.
Should I include business expenses?
Yes, if you need to recover them through the rate; otherwise the comparison will overstate take-home.
Does the calculator include employer NI?
The simplified limited-company route reflects employer NI within the extraction assumptions, but it is still only illustrative.
Why do umbrella and limited company results differ so much?
Umbrella pay is processed through payroll, while limited-company profit is taxed through a different structure with different deductions.
Can I use this for an actual contract quote?
Use it as a planning estimate only. Insurance, expenses, tax status and contract terms can all change the real result.