Charge rate to contractor take-home calculator

Which rates this uses, and where they come from

The figures are for the 2026 to 2027 tax year, 6 April 2026 to 5 April 2027, and were read on GOV.UK on 28 October 2026. Employer National Insurance is 15 per cent above a secondary threshold of £5,000 a year, the Apprenticeship Levy is 0.5 per cent of pay, and the employee primary threshold is £12,570 with the upper earnings limit at £50,270, from GOV.UK's rates and thresholds for employers 2026 to 2027. Employee National Insurance is 8 per cent between those two limits and 2 per cent above, from GOV.UK's National Insurance rates and categories. Income tax is the England, Wales and Northern Ireland scale from GOV.UK's income tax rates: a £12,570 personal allowance, 20 per cent up to £50,270, 40 per cent up to £125,140 and 45 per cent above, with the allowance reduced by £1 for every £2 of income over £100,000.

Holiday pay accrues at 12.07 per cent. GOV.UK sets statutory leave at 5.6 weeks, and 5.6 divided by the 46.4 weeks left in a 52-week year is 12.07 per cent; the pages read do not print that percentage themselves, so treat it as the usual arithmetic. Scottish income tax bands are not modelled.

How the umbrella figure is worked out

The charge rate times the days a week gives the weekly charge. The agency margin, as a per cent of the charge rate, comes off to give the money the agency pays on. The umbrella's own weekly margin comes off next, leaving a pot for the whole employment cost. That pot has to pay the contractor's gross pay, the employer National Insurance on it above the threshold, and the Apprenticeship Levy. Working backwards, gross pay for the year is the pot for the year plus 15 per cent of the £5,000 threshold, divided by 1.155. Holiday pay is part of that gross pay, not extra to it, and the page shows how much of the gross is the 12.07 per cent accrual. Income tax and employee National Insurance are then taken from the gross to give net pay, a year and a week.

The sums use 52 identical weeks and no pension contribution, student loan, benefits in kind, tax code adjustments or Employment Allowance. Real umbrella payslips differ on all of these, and a contractor with a pension or a student loan will take home less.

The limited company side

A contractor engaged through their own limited company invoices the agency, which pays the invoice gross. On the same example the company receives £2,125 a week, £110,500 over 52 weeks. What the contractor keeps from that depends on the company's corporation tax, its running costs and how the contractor's accountant takes the money out, so the calculator deliberately gives no take-home figure. The two columns are not a like-for-like contest: the umbrella figure is net pay, the company figure is gross income before the company's own tax and costs.

Which route a role uses is for the end client's determination. Inside IR35 roles typically run through umbrella or deemed-employment payroll. See PSC versus umbrella for how the routes differ for an agency, and the IR35 fee payer answer for who carries the duties.

When to use it, and its limits

Use it to see the shape of a deal before a rate conversation: how much of a charge rate reaches the contractor's side, and roughly what an umbrella contractor would see on a payslip at a given rate. It is not advice, a payslip or a quote. The contractor's accountant or umbrella gives the real figure, and the rates change each April.

Common questions

How much of a charge rate does a contractor keep?

It depends on the agency margin, the route and the contractor's circumstances. On the default example, an umbrella contractor on a £500 day rate keeps about £1,265 a week net after employer costs, tax and National Insurance. A limited company contractor is paid £2,125 a week gross, and keeps less once the company's own tax and costs are paid.

Why is umbrella pay lower than the pay rate suggests?

The pay rate is the money the agency passes on. The umbrella then takes its fee, employer National Insurance and the Apprenticeship Levy out of that before the contractor's gross pay is set, and income tax and employee National Insurance come out of the gross.

Does the calculator say whether a role is inside IR35?

No. It only notes that inside IR35 roles typically run through umbrella or deemed-employment payroll. Status is a determination for the end client or a specialist adviser.

Which tax year are the figures for?

2026 to 2027, 6 April 2026 to 5 April 2027, from GOV.UK pages read on 28 October 2026. The selector will gain the next year when its rates are published.