Outside IR35 Calculator via Limited Company

Outside IR35 Calculator – Work Out Your Take-Home Pay

Curious about how much you would be earning as a limited company contractor? Are you looking to maximise your earnings for the contracts outside IR35? When you work outside of IR35, you typically have more control over your earnings, but how much do you actually take home? Use our free Outside IR35 Calculator to quickly work out your net income after accounting for tax, salary, dividends, and business expenses. This tool gives you a straight answer on what really lands in your bank account after tax. Whether you are new to contracting or already working through your own limited company, either way, you get a real-world look at your earnings.

Use our Outside IR35 Tax Calculator to compare contract rates, plan ahead, and see exactly how working outside IR35 affects your bottom line. You get answers in seconds, so you can make decisions with confidence.

What is IR35?

IR35 is a tax regulation in the UK that determines whether a contractor is truly self-employed or functioning more like an employee. This rule is relevant for individuals who offer services through a limited company, often referred to as a personal service company.

If your contract falls outside of IR35, HMRC considers you self-employed for tax purposes. This status allows you greater flexibility to pay yourself a mix of salary and dividends. Plus, you might have the opportunity to claim a wider range of business expenses.

What Does “Outside IR35” Mean?

When you’re “outside IR35,” HMRC sees you as a proper business, not just another employee dodging taxes. Basically, you get complete control over how you work, when you work, and how you get the job done. That’s what puts you outside those IR35 rules, which are meant to crack down on people pretending to be contractors when they’re actually employees.

IR35 draws a line between true independent contractors and people who are, let’s be honest, just working like any other employee for their client. They look at things like how much control you have, if someone’s supervising you, whether you’re allowed to send someone else to do the job, and if you’re taking on real business risks.

Inside IR35 vs Outside IR35

Inside IR35

• You’re treated like an employee for tax.
• You pay tax and National Insurance in a similar way to PAYE workers.
• You cannot claim most business expenses.
• Your take-home pay is usually lower.

Outside IR35

• You’re treated as a true contractor running your own business.
• You can work through your limited company.
• You choose how to pay yourself with a mix of salary and dividends.
• You can claim real business expenses related to your work.
• Your take-home pay is often higher compared to inside IR35 roles.

Why Contractors Prefer Outside IR35

Running your own limited company outside IR35 means you’re in charge. You manage your income your way, not just as a standard salary. You can:

• Use a limited company to manage your income professionally
• Split income between salary and dividends to lower your tax bill
• Claim legitimate business expenses, such as travel, equipment and training
• Keep a higher share of your contract income, giving you more financial control

Benefits of Working Through a Limited Company When Outside IR35

Operating outside IR35 through your own limited company puts you in control. You get to choose how you pay yourself, manage your taxes, and oversee your company’s finances every day. Compared to working inside IR35 or using an umbrella company, it’s simply much more flexible. Here’s why many contractors pick this path:

• Higher Take-Home Pay - You end up taking home more money. By paying yourself a combination of salary and dividends, you keep a larger share than if you were just on a standard payroll.
• Decide How You Get Paid - With a limited company, you control your own pay structure. Maybe you opt for a modest salary and take the rest as dividends, or you adjust things as your needs change. You can manage your cash flow and align your income with your goals.
• Claim Valid Business Expenses - Running your own company lets you claim plenty of costs: travel, equipment, software, training, accountancy fees, even expenses for working from home. These are all valid business expenses, reducing your profits and leaving you with more money.
• Full Control of Your Finances - You choose what happens with your profits. Want to put money back into your company? You can. Prefer to save for the future or invest in your next project? That’s your choice. Every financial decision is yours to make.
• Ideal for Long-Term Contracts - If you’re planning to take on several long-term contracts, a limited company is the best option. It provides a stable, flexible, and professional setup that clients appreciate. Plus, it can make securing bigger and higher-value contracts much easier.

What is the Outside IR35 Take Home Calculator?

The Contractor Outside IR35 Calculator is an online tool that helps contractors running their own limited companies figure out how much money they can actually take home. It provides an overview of your net income by taking into account important factors like taxes, expenses, salary, and dividends.

This calculator is particularly beneficial for contractors with contracts that fall outside of IR35. If your contract qualifies under the outside IR35 guidelines, you can pay yourself in a more tax-efficient manner compared to being inside IR35 or working through an umbrella company.

Who Should Use Our Outside IR35 Contractor Calculator?

This Outside IR35 Salary Calculator is made for anyone working in the UK through their own limited company. It’s perfect for:

• Contractors operating through a limited company - If you already run a limited company or plan to start one, this calculator gives you a realistic view of how your day rate turns into real income after all taxes and costs.
• Professionals who have passed an IR35 assessment - If you have successfully passed an IR35 assessment and confirmed your contract is outside the IR35 rules, this tool will help you estimate your income.
• Freelancers managing their own finances - If you're taking care of your taxes, pension contributions, and business expenses, this calculator will assist you in planning your income more effectively.
• New Contractors Deciding Between Umbrella and Limited Company - Those new to contracting often compare different ways of working. This calculator makes it clear. You’ll see, in plain terms, how much more you keep when you work outside IR35 through your own limited company compared to using an umbrella.

How the Outside IR35 Calculator Works?

Using our IR35 Take Home Pay Calculator is super easy! It uses figures based on the current tax year and applies the same method an accountant would use when working out your limited company profits.

Just follow these simple steps to get precise results and really make the most of this handy tool.

Step 1. Select the type of calculation you want: by default we suggest a day rate but you can select between "Day Rate" or "Annual Pay".

Step 2. Your day rate: if you selected "Day Rate" as the calculation type then adjust your day rate.

Step 3. Specify days worked per year: if you selected "Day Rate" then the default we suggest is 200 days due to weekends, public holidays and general holiday time off. 220 days is ambitious and 180 days is a fairly conservative estimate to assume you may have a longer break between contracts.

Step 4. Adjust your annual pay: if you selected "Annual Pay" then adjust this for your estimated annual pay.

Step 5. Estimate your business expenses: enter your estimated annual business expenses. We suggest £3,000 as a pretty conservative estimate for accounting fees and other business related expenses you can claim. Increasing your business expenses can reduce the amount of corporation tax you pay.

Step 6. Add your pension contributions: Enter the amount you contribute to your pension fund.

Step 7. Input gross salary through your Limited Company: Input your total salary paid through your limited company before any deductions. The optimum salary would be £12,570 (your personal allowance) and take the remaining funds as dividends. You'll have a small amount of Employer National Insurance to pay.

Once you’ve entered all the necessary information, our contractor take home pay outside IR35 calculator will provide you with a detailed financial breakdown.

1. Annual Gross Pay: This is your total earnings before any tax or expenses are taken out.

2. Net Profit After Tax: After subtracting your salary and expenses from your total income, the calculator shows:

• Corporation tax charged on your company’s net income: £[amount]
• Corporation tax rate used: [rate]%
• Total corporation tax due: £[amount]

3. Net Dividends Received After Tax: After paying corporation tax, the remaining profit can be taken as dividends. Here’s the breakdown:

1. Total available dividends to withdraw: £[amount]
2. Tax-free dividend allowance used: £[amount]
3. Dividends taxed at 8.75% (basic rate): £[amount]
4. Dividends taxed at 33.75% (higher rate): £[amount]
5. Dividends taxed at 39.35% (additional rate): £[amount]
6. Total dividend tax to pay: £[amount]

4. Net Take-Home Pay: The calculator then adds everything up to show:

1. Your basic salary: £[amount]
2. Your dividends: £[amount]
3. Total tax paid (corporation + dividend): £[amount]
4. Your effective income tax rate based on your full income: [rate]%

Benefits of Using Our Outside IR35 Take Home Calculator

• Quick and easy to use – Get instant results without complicated steps
• Tailored for contractors – Built for UK freelancers and limited company directors
• Accurate 2025/26 figures – Includes the latest tax rates and allowances
• Breaks down taxes clearly – See how much goes to tax, salary, and dividends
• Helps with contract planning – Useful before accepting or quoting for new work
• Supports smarter decisions – Understand what you’ll really earn after deductions
• Free to use anytime – No signup or hidden costs
• Great for comparing options – Test different rates, expenses, and income splits
• Works well with other tools – Combine with IR35 review or accounting support
• Saves time and reduces guesswork – Know your take-home pay in minutes

Need Help with Your IR35 Status or Take Home Pay?

Give our Contractor Outside IR35 Calculator a try today and find how much you could be earning! This handy tool helps you get a clear picture of your earnings, expenses, and tax responsibilities. Planning ahead for the next tax year? Unsure which contract to go for? This calculator gives you the insights you need to make confident decisions. And if you’re uncertain about your contract’s IR35 status, check out our IR35 assessment checker.

At GoForma, we pride ourselves on our expertise in contractor accounting. We work with IT professionals, consultants, freelancers, and other independent workers across the UK. Our contractor accountants understand how IR35 works and how it impacts your take-home pay, taxes, and business setup.

Whether you need help with salary and dividends, tax returns, or figuring out if your contract is inside or outside IR35, we’re here to support you! Book a free consultation discuss your finances and get guidance to ensure you’re making the best financial decisions.

FAQs about Contractor Calculator Outside IR35

What does this calculator include?

This IR35 outside calculator includes your contract day rate, number of working days, business expenses, pension contributions, salary, dividends, and the taxes you’ll need to pay. It gives a clear estimate of your take-home pay.

Which pays more inside or outside IR35?

Working outside IR35 typically results in higher take-home pay for contractors compared to working inside IR35. When inside IR35, you're taxed similarly to an employee, paying income tax and National Insurance through PAYE, which reduces your net income. Outside IR35, you have more flexibility in how you pay yourself, often combining salary and dividends, leading to greater tax efficiency and higher net earnings.

How does working outside IR35 impact take-home pay?

Your take-home pay is usually higher because you can use salary and dividends and claim business costs.

How long can you work outside IR35?

There is no fixed time limit on how long you can work outside IR35. Your IR35 status depends on the nature of your contract and working practices, not the duration of your engagement. Even long-term contracts can be considered outside IR35 if they reflect a genuine business-to-business relationship.

How do you prove you're outside IR35?

To prove you're outside IR35, keep a written contract that reflects self-employed terms and shows things like control over your work, the right to send a substitute, and no employee-like obligations. You can also use an IR35 assessment tool or get a review from a qualified accountant for contractor.

Can I use this if I have multiple contracts?

Yes, you can use this calculator if you have multiple contracts. Just add up the income and working days from all your contracts to get a total estimate.

Are the take home pay calculator outside IR35 results confidential?

Yes, your privacy is our priority. All data entered into the calculator is kept confidential and is not stored or shared with any third parties.

Who pays tax if outside IR35?

When working outside IR35, you are considered self-employed for tax purposes. This means you're responsible for managing and paying your own taxes.

Can pension contributions be made as a contractor outside IR35?

Yes, as a contractor working outside IR35, you can make pension contributions through your limited company. These contributions are made before tax, which can reduce your company's Corporation Tax liability and increase your overall tax efficiency.

Can I claim expenses like a laptop or training?

Yes, if you're working outside IR35 through a limited company, you can usually claim business expenses like a laptop or training, only if they're used for your work.

How to pay yourself outside IR35?

If you’re working outside IR35, you can usually pay yourself through a mix of a salary and dividends. You take a salary through your limited company and then draw dividends from the remaining profits after tax.

Who decides if a contract is inside or outside IR35?

Since April 2021, the responsibility for deciding whether a contract is inside or outside IR35 usually lies with the end client or recruitment agency that pays your limited company. This applies to both private and public sector contracts.

‍Is a limited company better for outside IR35 work?

Yes, it normally gives you more flexibility, lower taxes and higher take-home pay compared to umbrella work.