Outside IR35 Calculator – Work Out Your Contractor Take Home Pay
Our outside IR35 calculator helps UK contractors instantly determine their take-home pay when working outside IR35 rules. Simply input your day rate, contract length, and expenses to calculate your net income after corporation tax, dividend tax, and National Insurance contributions, ensuring accurate financial planning for your contracting business.
Outside IR35? Instantly Calculate Your Take Home Pay
Unsure about how much you would be earning as a contractor? Are you looking to maximise your earnings for the contracts outside IR35? Our Outside IR35 Calculator is here to simplify things for you. Our contractor calculator is a handy tool designed to help freelancers, limited company directors and contractors who falls outside IR35 scope to calculate their take-home pay after taxes, National Insurance contributions, and other deductions.
As an outside IR35 contractor, you can pay yourself through dividends, claim a wider range of expenses, and enjoy greater control over your earnings. Our Contractor Outside IR35 Calculator is designed to provide precise calculations, so you know exactly what to expect.
What is Outside IR35?
IR35 refers to a set of tax regulations put in place by HMRC to determine whether a contractor is genuinely self-employed or more like to an employee. These rules play a crucial role in figuring out how tax and National Insurance contributions should be paid.
If you find yourself "Outside IR35," it means HMRC recognises you as genuinely self-employed. You’re essentially running your own business, often through a limited company, giving you greater control over how, when, and where you work.
Being outside IR35 typically allows you to pay less tax compared to someone who falls "inside." You can pay yourself a mix of salary and dividends, claim business expenses, and ultimately keep more of your earnings. For many contractors, this setup leads to a higher take-home pay.
Who Should Use Our Outside IR35 Contractor Calculator?
Designed for UK Contractors & Freelancers
This Outside IR35 Calculator is made for anyone working in the UK through their own limited company. It’s perfect for:
- IT contractors
- Engineers and technical professionals
- Consultants in any industry
- Designers, writers, and other creatives
- Freelancers and self-employed specialists
Keeping an eye on your take-home pay is a smart way to manage your finances. It gives you a clear picture of what you actually bring home after taxes, salary deductions, and business expenses. This clarity makes budgeting, planning for upcoming costs, and making wise financial decisions a whole lot easier.
This calculator comes in particularly handy when you're gearing up to start a new contract. It can help you figure out what rate to charge and whether working throygh your company is still the best choice. Plus, it’s a great resource if you’re considering how to pay yourself, whether that’s through salary, dividends, or a mix of both.
Feel free to use it as often as you need to keep track of your income and make informed choices about your work.
How the Outside IR35 Calculator Works?
Using our Contractor Calculator is straightforward. Follow these steps to get accurate results and make the most of the tool.
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".
2. Your day rate: if you selected "Day Rate" as the calculation type then adjust your day rate.
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.
4. Adjust your annual pay: if you selected "Annual Pay" then adjust this for your estimated annual pay.
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.
5. Add your pension contributions: Enter the amount you contribute to your pension fund.
6. Input gross salary through your Limited Company: Input your total salary paid through your limited company before any deductions. The most tax efficient option would be to set this at £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 calculator will provide you with a comprehensive 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:
3. Net Dividends Received After Tax: After paying corporation tax, the remaining profit can be taken as dividends. Here’s the breakdown:
- Total available dividends to withdraw: £[amount]
- Tax-free dividend allowance used: £[amount]
- Dividends taxed at 8.75% (basic rate): £[amount]
- Dividends taxed at 33.75% (higher rate): £[amount]
- Dividends taxed at 39.35% (additional rate): £[amount]
- Total dividend tax to pay: £[amount]
4. Net Take-Home Pay: The calculator then adds everything up to show:
- Your basic salary: £[amount]
- Your dividends: £[amount]
- Total tax paid (corporation + dividend): £[amount]
- Your effective income tax rate based on your full income: [rate]%
Benefits of Using Our Outside IR35 Take Home Calculator
Need Help Understanding Your IR35 Status or Pay?
Try our Contractor Outside IR35 Calculator now to see how much you can earn! By using this calculator, you gain a clear understanding of your earnings, expenses, and tax obligations. Whether you're planning for the upcoming tax year or evaluating different contracts, our outside IR35 calculator provides the insights you need to make informed decisions. If you're unsure about your contract status, you can also try our IR35 assessment checker.
At GoForma, our team specialises 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 assistance with salary and dividends, tax returns, or figuring out if your contract falls inside or outside IR35, we’ve got your back! Book a free consultation discuss your finances and get guidance to ensure you’re making the best financial decisions.
FAQs about Contractor Outside IR35 Calculator
What is the outside IR35 calculator?
An Outside IR35 calculator is an online tool designed for UK contractors, freelancers, and consultants to estimate their take-home pay when working outside the IR35 rules. By inputting details such as your day rate, number of working days, business expenses, pension contributions, and gross salary, the calculator provides a breakdown of your income after taxes and expenses. This helps you understand your potential earnings and plan your finances effectively.
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 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 demonstrate that you're working outside IR35, it's important to gather evidence showing you're operating as an independent business rather than as an employee. Key indicators include having a well-drafted contract that outlines your autonomy, the ability to send a substitute to complete work, and bearing financial risk for the services you provide.
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.
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