Contractor Planner

Tax Year 2026/27

Compare modeled annual cash take-home and net-position estimates across PAYE, umbrella and limited-company scenarios.

Before you start

The sample starts at £650/day × 5 billable days/week × 46 working weeks = £149,500 annual contract income before costs; the PAYE baseline initially uses the same gross amount. Other sample assumptions are £8,000 annual expenses, £12,000 annual pension, £25/month umbrella margin, £1,200/year limited-company admin and £0 commute.

“Take-home” is modeled cash. “Net position” adds the modeled pension value and subtracts commute costs. These are different measures; neither is a guaranteed payslip figure. The IR35 selector only chooses scenarios and cannot determine your status. Region choices are England, Wales and Northern Ireland (rUK) or Scotland.

Website updated 10 October 2026. Tax rates and payroll arrangements can change; check the selected tax year and confirm real deductions with HMRC, the umbrella provider or a qualified adviser.

Preparing the contractor planner…

About this calculator

Contractor Planner compares modelled cash and net-position estimates across PAYE, umbrella and limited-company scenarios for the selected UK tax year and region.

This planner converts day rate × billable days per week × working weeks per year into annual contract income, then compares selected PAYE, umbrella and limited-company scenarios.

It provides a scenario estimate, not an IR35 determination, umbrella payroll quote, tax return or personal recommendation. Actual company, pension and payroll treatment depends on your contract and circumstances.

Contractor, IR35 and umbrella FAQs

What does the UK Contractor Planner compare?

It compares simplified take-home scenarios for PAYE, an umbrella company, and a limited company in selected IR35 positions. Your result depends on the contract income, tax year, region, pension, expenses, student-loan plan and other assumptions you enter; it is not a quote or a status decision.

How is contractor income calculated in this tool?

Annual contract income uses day rate × days per week × working weeks per year. The default sample is £650 × 5 × 46 = £149,500 before costs. The planner does not infer downtime, unpaid leave, rate changes, late payment or VAT; replace the sample with a realistic estimate.

What is IR35 or the off-payroll working rule?

The off-payroll working rules apply where a worker providing services through an intermediary would have been an employee if engaged directly. They are applied contract by contract and can produce different outcomes for different engagements.

Who decides whether a contract is inside or outside IR35?

In most public-sector and medium or large private-sector client engagements, the client is responsible for determining status and issuing a Status Determination Statement with reasons. For a worker providing services to a small private-sector client, the worker’s intermediary is generally responsible. The tool cannot replace that assessment.

What is a Status Determination Statement (SDS)?

An SDS records the client’s conclusion about off-payroll status and the reasons for it. If you disagree, use the client’s disagreement process and keep the contract and working-practice evidence; changing the calculator toggle does not change the legal determination.

Does using an umbrella company mean I am outside IR35?

Not necessarily. If you are employed by an umbrella company, the off-payroll rules are unlikely to apply to that employment, but your pay still follows employment and PAYE rules. The umbrella is your employer and should provide an itemised payslip and explain the assignment-rate deductions.

Why can an umbrella assignment rate be higher than my gross pay?

The assignment rate paid to the umbrella can fund employer costs before your gross pay is calculated, including employer National Insurance, pension contributions, holiday pay, Apprenticeship Levy where applicable, and the umbrella margin. Your gross pay is then reduced by employee deductions such as Income Tax, employee National Insurance, pension and student-loan repayments where applicable.

Is an umbrella company allowed to deduct employer National Insurance from my payslip?

Employer National Insurance is an employer cost and should not appear as an employee deduction from your gross pay. It can nevertheless reduce the amount available from the assignment rate before gross pay is calculated, so check the reconciliation statement and ask for a clear breakdown of every deduction.

Does the calculator decide whether I should use a limited company?

No. It displays a simplified comparison using the assumptions you provide. A limited-company decision also depends on the contract, IR35 status, company administration, accounting, VAT, pension strategy, extraction choices, liability and cash-flow needs, none of which is fully determined by the headline take-home figure.

Are all contractor expenses tax-deductible?

No. Treatment depends on the working arrangement, the expense, the journey or purpose, the contract and the applicable tax rules. The planner uses an input assumption for scenario comparison; it does not confirm that an expense is allowable or that evidence is sufficient.

Why can a result change after I edit an input?

Each distinct input set is recalculated by the site’s UK scenario model. A result is not shown as current while an updated calculation is pending. Estimates can still differ from payroll or accounts because tax codes, benefits, pension treatment, loan deductions and contract facts are not all represented.

Which tax year and region does the Contractor Planner use?

The page starts with the current UK tax year and rUK assumptions, but you can change the tax year, region and student-loan plan in the inputs. The rUK and Scottish Income Tax systems differ, and the result should be checked against the selected year and your actual payroll or company records.

Public resources and sources

These official HMRC, GOV.UK and GOV.SCOT resources cover the 2025/26 and 2026/27 Income Tax, National Insurance, dividend, Corporation Tax, student-loan, pension, IR35 and umbrella assumptions. The calculator remains a simplified scenario tool and does not determine employment status, tax compliance or the suitability of a company structure.

GOV.UK: Understanding off-payroll working (IR35)
HMRC guidance on scope, responsibility for status, contract-by-contract treatment and deemed-employer deductions.
GOV.UK: Off-payroll working for clients
HMRC guidance for public-sector and medium or large private-sector clients.
GOV.UK: Working through an umbrella company
How assignment rates, employer costs, gross pay, PAYE deductions and payslips should be explained.
GOV.UK: Check your payslip if you work through an umbrella company
HMRC warnings about disguised remuneration, margins and checking deductions.
GOV.UK: Income Tax rates and allowances by tax year
Current and previous Income Tax bands, Personal Allowance, taper and dividend rates for the two selectable years.
GOV.UK: Scottish Income Tax rates and bands by tax year
Scottish non-savings and non-dividend bands for the selected tax year, including 2025/26 and 2026/27.
GOV.UK: Rates and thresholds for employers 2026/27
PAYE and National Insurance thresholds for 2026/27.
HMRC: National Insurance rates and allowances by tax year
Employee, director and employer NI rates and thresholds, including 2025/26 and 2026/27.
GOV.UK: Corporation Tax rates and marginal relief
Small-profits/main rates, marginal relief and associated-company threshold limits.
GOV.UK: Tax on dividends
The £500 dividend allowance and rate treatment in the selected year.
GOV.UK: Student loan repayment rates and thresholds
Repayment percentages and current thresholds by loan plan; use the historical threshold tables for prior tax years.
GOV.UK: Previous annual student loan repayment thresholds
Historical thresholds for Plan 1, Plan 2, Plan 4 and postgraduate loans, including 2025/26.
GOV.UK: Pension Annual Allowance
Annual allowance, carry-forward and circumstances that can reduce the available allowance.

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