Tool
IR35: inside vs outside
The same contract, taxed as a deemed employee against run through your own limited company.
What the client pays for the work, before any deductions.
Outside IR35 keeps more
£4,481
a year, on this contract value
Inside IR35
| Contract value | £80,000 |
| Employer's NI (deducted first) | -£9,783 |
| Deemed salary | £70,217 |
| Income tax | -£15,519 |
| Employee NI | -£3,415 |
| Take-home | £51,283 |
Outside IR35 (your own ltd co)
| Contract value | £80,000 |
| Salary drawn | £12,570 |
| Corporation Tax | -£13,818 |
| Dividends paid | £52,476 |
| Income tax + dividend tax | -£9,282 |
| Take-home | £55,765 |
A simplified model, not a deemed-payment return: inside IR35 assumes the fee-payer deducts employer's NI from the contract value first, then taxes the rest exactly like salary - the real deemed-payment calculation has its own offsets (a pension contribution reduces it, for one) this doesn't model. Outside IR35 assumes the salary/dividend split that keeps the most money, the same optimum the Salary vs dividends calculator finds for an existing director. Doesn't decide your IR35 status - that depends on the working arrangement, not the money.
An illustration from the figures above, not a forecast. Facts, not financial advice.
Uses 2026/27 HMRC rates and thresholds, checked against gov.uk.
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