2025/26 · Inside IR35 · Umbrella Model

Inside IR35 Take-Home Calculator 2025/26

Full deduction chain including Employer's NI, Apprenticeship Levy and umbrella fees. Group 1 employer costs are carved from your assignment rate first. Group 2 employee deductions come from what remains.

Contract Details

£

Group 1 — Employer Costs

These are deducted from your assignment rate before deemed salary is calculated. Employer's NI (15%) and Apprenticeship Levy (0.5%) are statutory and always apply.

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Group 2 — Employee Deductions

Calculated from your deemed salary. Employee's NI and Income Tax are always applied. Pension uses relief at source — HMRC adds 20% tax relief into your pot.

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Both percentages are calculated on your deemed salary — not your gross assignment rate. Deemed salary is lower, so the actual £ contribution will be less than applying the same % to your day rate.

Total going into pension/yr
—
Your actual pension cost/yr
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Assignment Rate
—
gross contract value
Group 1 Total
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employer-side costs
Group 2 Total
—
employee deductions
Net Take-Home
—
in your bank account
ItemRateDailyMonthlyAnnual
Overall Effective Deduction Rate (% of assignment rate lost) —%
0%25%50%75%100%
⚠ Disclaimer — The figures on this page are estimates only. Tax legislation is complex and your personal circumstances may affect the actual amounts deducted. These calculations should not be relied upon as financial or tax advice. Always verify your take-home pay and deductions with a qualified accountant or tax adviser before making any financial decisions.

How the IR35 Inside Deduction Chain Works

Group 1 — Employer Costs.

The umbrella receives your full assignment rate. They deduct their margin, Apprenticeship Levy (0.5%), and Employer's NI (15% above the secondary threshold of £5,000/yr). If pension is on, the employer contribution also comes off here. What remains is your deemed salary — this is the gross figure you see on your payslip.

Group 2 — Employee Deductions.

From your deemed salary, Employee's NI (8% from £8,060 to £50,270, then 2%) and Income Tax (via your tax code) are deducted. The employee pension contribution and any student loan repayments also come from here.

Why you pay pension twice.

Both employer and employee contributions originate from your assignment rate. In normal employment the employer contribution would be an additional cost to your employer — here it's carved from money that was nominally yours. The upside: the full combined amount (plus HMRC tax relief) accumulates in your pot.

Relief at source (employee pension).

The umbrella deducts the full stated % from your net pay, then HMRC adds 20% basic rate tax relief directly into the pension pot. So a 5% contribution only costs you 4% — the other 1% comes from HMRC. This calculator shows both the deduction and the effective cost.