Contractor Tax Calculator (2026)
Estimate limited company contractor take-home pay after expenses, salary, corporation tax and dividend tax assumptions.
United Kingdom Calculator
Adjust Your Inputs
Move the sliders or type exact numbers. Results update instantly.
Instant Estimate
Your Results
Estimated Take-Home Income
£69,123
Based on your selected contractor tax calculator assumptions. Try different sliders to compare scenarios.
Corporation Tax
£24,358
Dividend Tax
£16,520
Available Dividends
£73,073
Autumn Budget Employer NI Update (From April 2025):
• Employer Class 1 National Insurance rises to 15.0% (from 13.8%).
• Secondary threshold reduces from £9,100 to £5,000 per year (£96/week), increasing assignment deductions on contractor umbrella invoices.
These calculations are financial projections and planning estimates, not tax, legal or licensed financial advice. HMRC 2025/2026 statutory rates, NI thresholds, and local council rates apply.
How to Use the Contractor Tax Calculator
Enter annual contract turnover
Input your limited company’s gross billing revenue (Outside IR35).
Input allowable business expenses & director salary
Deduct software, equipment, travel, and optimum director salary (typically £12,570).
Calculate Corporation Tax and dividend tax
Review post-tax profits distributed as dividends and your combined personal net income.
Formula & Calculation Methodology
Contractor Take-Home = Salary after tax and NI + Dividends after corporation and dividend taxThis calculator uses standard United Kingdom financial formulas, IRS thresholds, and amortization schedules. All results compute instantly in your browser with zero data stored or transmitted.
Calculation Examples & Scenarios
Outside IR35 Consultant (£120,000 Billing)
£120,000 turnover, £10,000 expenses, £12,570 salary, 25% corporation tax rate, balance taken as dividends.
Key Benefits
- Calculates the optimal salary and dividend tax split for UK Limited Company directors
- Accounts for the 19% small profits rate, 25% main rate, and HMRC dividend tax bands
- Demonstrates the significant tax efficiency of Outside IR35 limited company trading
Common Use Cases
- Limited company contractors comparing Outside IR35 retainers with permanent PAYE salaries
- Company directors determining the most tax-efficient dividend distribution schedule
- Accountants modeling corporate tax provisions and personal self-assessment liabilities
The Optimum Director Salary & Dividend Strategy
For most single-director limited companies without other earned income, paying a salary equal to the primary threshold (£12,570) generates zero employee and employer National Insurance while securing qualifying State Pension credits.
Remaining company profits after allowable business expenses and Corporation Tax can be withdrawn as dividends, which enjoy lower tax rates (8.75% basic, 33.75% higher, and 39.35% additional) and are completely exempt from National Insurance.
Frequently Asked Questions
No. It is a limited company tax estimate and does not determine employment status or IR35 treatment.
No. VAT is not included in this simplified planning estimate.
Related United Kingdom Calculators
Bonus Tax Calculator
Estimate UK bonus take-home pay after PAYE income tax and employee National Insurance.
CIS Calculator
Estimate Construction Industry Scheme deductions from labour income and material costs.
Dividend Tax Calculator
Estimate UK dividend tax using other income, dividend income and the dividend allowance.
Child Benefit Tax Calculator
Calculate the High Income Child Benefit Charge under 2025/2026 rules (£60,000 to £80,000 threshold), tax clawback, and how pension contributions restore 100% of your benefit.
NI Calculator
Estimate Class 1 employee National Insurance contributions and take-home deductions for 2025/2026.
PAYE Calculator
Estimate UK PAYE income tax from annual taxable pay, tax-free allowance and pay frequency.
Salary Sacrifice Pension
Calculate your exact take-home pay, income tax savings, and National Insurance savings when sacrificing salary into your workplace pension.
Salary Sacrifice Calculator
Estimate take-home pay impact and tax/NI savings from salary sacrifice pension contributions.
Related United Kingdom Guides
Contractor and Dividend Tax Planning Guide UK
Plan limited company contractor income using salary, expenses, corporation tax and dividend tax assumptions.
Self Assessment Tax Calculator Guide UK
Estimate a Self Assessment balance using employment income, self-employment profit, dividends and tax already paid.
UK High Earner Tax Planning Calculations
Review tax bands, pension contributions and allowance tapering for higher earners.