Outside IR35 you take a small salary plus dividends, paying corporation tax at 19% to 25% first, then dividend tax on what you draw.
Reference notes for the UK tax year 2026/27, computed from HMRC's published rates rather than copied from another site.
The chain, in order:
- Day rate × days billed = company turnover
- Minus expenses and your salary
- Corporation tax on the profit: 19% up to £50,000, 25% above £250,000, with marginal relief between
- Dividends drawn from what is left, taxed at 10.8% / 35.8% / 39.4%
Marginal relief in the £50,000 to £250,000 band produces an effective corporation tax rate of 26.5%, higher than the 25% main rate.
The usual salary is set at the National Insurance secondary threshold so the company gets the deduction without triggering employer NI.
Nothing here decides your IR35 status, which is a question about the working relationship: substitution, control and mutuality of obligation. Getting the status wrong is far more expensive than getting the arithmetic wrong.
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Full deduction breakdowns, computed on 2026/27 rates:
| Salary | Take-home a year | Take-home a month |
|---|---|---|
| £40,000 after tax | £32,319.60 | £2,693.30 |
| £60,000 after tax | £45,357.40 | £3,779.78 |
| £80,000 after tax | £56,957.40 | £4,746.45 |
| £100,000 after tax | £68,557.40 | £5,713.12 |
- Umbrella company calculator — the inside-IR35 comparison
- Dividend tax calculator — the tax on the dividends you draw
- Contract vs permanent calculator — compare the whole package with a salary
- UK tax rates and thresholds 2026/27 — every band and threshold on one page
- Take-home pay statistics — effective and marginal rates from £20,000 to £200,000, free to cite
- How the calculator works — the order of calculation and the source for every rate
- rates.json — the same figures as machine-readable JSON, no key required
- Self-Employed Tax Calculator UK
- Dividend Tax Calculator UK
- Umbrella Company Calculator UK
- Day Rate to Salary Calculator UK
Full index: UK Tax & Take-Home Pay Guide — twelve guides, twelve worked salary examples and a reference table covering the whole UK system.
Figures are for the 2026/27 tax year, which runs 6 April 2026 to 5 April 2027, and were checked against gov.uk on 28 August 2026.
Rates change every April, and often at a Budget. Check the tax year a figure belongs to before relying on it.
Found a wrong number? Open an issue with the figure and a gov.uk link. Tax errors are worth fixing quickly.
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