Calculate take-home pay through an umbrella company. See full payslip breakdown with employer NI and fees.
By Konstantin Iakovlev · Founder, Calks.uk
Last updated: · Verified against HMRC and GOV.UK 2026/27 rates
Rates verified: 28 September 2026
Annual Take-Home Pay
£52,803.30
£4,400.27/month · 60.00% of assignment income · plus £3,522.40 into your pension
| Assignment income (220 days x £400) | £88,000.00 |
| Umbrella margin (£25.00 x 44.0 weeks) | -£1,100.00 |
| Employer NI (15% above £5,000) | -£10,175.66 |
| Apprenticeship Levy (0.5%) | -£364.19 |
| Employer pension (3% of qualifying earnings) | -£1,320.90 |
| Gross Salary | £75,039.25 |
| Your pension by salary sacrifice (5% of qualifying earnings) | -£2,201.50 |
| Taxable Pay | £72,837.75 |
| Income Tax | -£16,567.10 |
| Employee NI | -£3,467.35 |
| Take-Home | £52,803.30 |
2026/27 annual estimate for England, Wales and Northern Ireland, with no student loan. Qualifying earnings are pay between £6,240 and £50,270; setting your pension to 0% treats you as opted out, so the employer 3% stops too. Holiday pay is funded from the same assignment income, so these annual figures include it whether it is rolled up (12.07%) or banked.
Disclaimer
This calculator is for guidance only. It is not financial or tax advice: check anything you rely on against the official source or a qualified adviser. Rates and figures come from HMRC and GOV.UK and are reviewed for the 2026/27 tax year. Everything is calculated in your browser; nothing you enter is sent to our servers.
How It Works
An umbrella company employs contractors on behalf of end clients and handles all the payroll administration. Your assignment rate is paid to the umbrella, which deducts employer NI (15% above £5,000), the apprenticeship levy where it applies, employer pension contributions and a margin fee before running PAYE on what is left. Most contractors end up on one because the contract is inside IR35, because the client insists on a PAYE arrangement, or because they want something simpler than running a limited company. The sector grew sharply after the IR35 reforms of 2017 and 2021, and the government puts the number now paid this way at around 700,000.
Your payslip from an umbrella shows the assignment rate, less employer costs, giving a gross salary figure. From that gross, income tax, employee NI, employee pension and any student loan repayments are deducted to arrive at your take-home pay. The difference from ordinary PAYE employment is that you carry the employer NI cost yourself through a lower gross salary, along with the umbrella's own fee, usually a flat £15 to £30 for each week you work.
This calculator follows a day rate through the whole chain for a year: the umbrella margin for the weeks you work, employer NI at 15% above £5,000, the 0.5% Apprenticeship Levy, a 3% employer pension, then your own pension by salary sacrifice, income tax and employee NI. Take a £500 a day contract inside IR35 for 220 days, or £110,000. A £25 weekly margin over 44 weeks costs £1,100, employer NI £13,033, the levy £459 and the employer pension £1,321, leaving a gross salary of £94,087. After a £2,202 pension sacrifice, income tax of £24,186 and employee NI of £3,848, you keep £63,851, about 58% of the assignment income, with about £3,500 going into your pension.
Through your own limited company outside IR35, the same £110,000 with a £12,570 salary, no expenses and all the profit paid out as dividends would leave about £69,900 after employer NI, corporation tax and dividend tax. That is roughly £6,000 a year more in cash than the umbrella, before counting its pension contributions, and it matters across a contracting career. Margins are where umbrellas differ most. A flat £15 to £30 a week is typical, while a percentage margin gets steadily more expensive as your rate rises. Watch how holiday pay is handled as well: banked holiday is held back and paid when you take leave, while rolled-up holiday pay of 12.07% arrives with each payslip and has to be set aside for the weeks you are off.
Accreditation is the quickest sanity check on a firm. The FCSA and Professional Passport both audit their members, and the trusted brands include Giant, Parasol, NumberMill and ClearSky. Steer clear of anything sold as clever tax planning with a promised 80%+ take-home, because those are loan schemes, and HMRC investigates them and recovers the tax plus penalties from the worker rather than the promoter. Read the employment contract properly, and read the Key Information Document, the mandatory disclosure that sets out your pay and every deduction, before you sign anything.
Choosing between the two structures usually comes down to the contract rather than the arithmetic. An umbrella suits inside-IR35 work, contracts under 6 months where company setup is not cost effective, one-off assignments and anyone who would rather avoid the admin. A limited company suits outside-IR35 work, several clients at once, a long-term contracting career and the pension and other benefits a company allows. Plenty of contractors run both, keeping the company for outside-IR35 assignments and using an umbrella when a contract falls inside.
Regulation is tightening around the sector. Since 6 April 2026, under the Finance Act 2026, HMRC can recover PAYE an umbrella fails to pay from the agency that contracts with the end client, or from the end client itself where no agency is involved, and scrutiny of avoidance schemes has increased alongside it. The Employment Rights Act 2025 will also bring umbrella companies under the rules for employment businesses, enforced by the Fair Work Agency, once those provisions are commenced, which the government expects in 2027. Rolled-up holiday pay has to be shown clearly, and statutory rights such as sick pay, maternity and parental leave apply because the umbrella is legally your employer. Workers who spot non-compliance can report the firm to HMRC.
Example: £400/day for 220 days, £25/week margin, 5% pension (2026/27)
- Assignment income: £400 × 220 = £88,000, less umbrella margin £25 × 44 weeks = £1,100
- Employer costs, worked out on taxable pay of £72,837.75: NI 15% × (£72,837.75 − £5,000) = £10,175.66, Apprenticeship Levy 0.5% = £364.19, employer pension 3% × £44,030 qualifying earnings = £1,320.90
- Gross salary: £88,000 − £1,100 − £10,175.66 − £364.19 − £1,320.90 = £75,039.25
- Your pension by salary sacrifice: 5% × £44,030 = £2,201.50, so taxable pay is £72,837.75
- Income tax: 20% × £37,700 + 40% × £22,567.75 = £16,567.10; employee NI: 8% × £37,700 + 2% × £22,567.75 = £3,467.35
- Take-home: £72,837.75 − £16,567.10 − £3,467.35 = £52,803.30 a year (about £4,400 a month), 60% of the assignment income, plus £3,522.40 into your pension
Frequently Asked Questions
- How much will I take home through an umbrella company?
- On a £500 a day contract for 220 days, about £9,167 a month, the umbrella margin (£92), employer NI (£1,086), Apprenticeship Levy (£38) and a 3% employer pension (£110) leave a gross salary of about £7,841. After a 5% pension sacrifice (£183), income tax (£2,016) and employee NI (£321), you take home about £5,321 a month, 58% of the contract value, with about £294 a month going into your pension. The same work outside IR35 through a limited company, drawing a £12,570 salary and the rest as dividends, might leave about £5,830 a month, so the umbrella route costs roughly £6,000 a year in cash in exchange for much simpler admin.
- How do I choose a good umbrella company?
- Start with accreditation from the FCSA (Freelancer and Contractor Services Association) or Professional Passport, both of which audit their members. Established names include Giant Pay, Parasol, NumberMill, Brookson and ClearSky. A flat margin of £15 to £30 a week is the norm, and a percentage-of-contract margin costs more on high-value work. Ask whether holiday pay is banked for you to draw when you take leave rather than rolled up, and read the Key Information Document setting out your pay and deductions.
- Can I claim expenses through an umbrella company?
- Very few of them. Since April 2016 the Supervision, Direction and Control rules have blocked most contractor expenses, so lunch, everyday mileage and travel to your usual client site cannot be deducted from your taxable pay. Genuine client-instructed costs, such as occasional travel to a meeting away from your regular workplace, can still be reimbursed tax free if you keep receipts and declare them through the umbrella. Working outside IR35 through your own limited company, full expenses stay deductible.
- What employment rights do I get through an umbrella company?
- The umbrella is legally your employer, so you keep full employee rights, including 5.6 weeks of paid holiday a year, Statutory Sick Pay from the first day of sickness at £123.25 a week or 80% of your average weekly earnings if lower, Statutory Maternity Pay, pension auto-enrolment and redundancy pay after 2 years. A limited company contractor has none of that, being a director rather than an employee, and a worker whose status is decided by the client sits somewhere in between. The Employment Rights Act 2025 will also bring umbrella companies under the rules for employment businesses, enforced by the Fair Work Agency, once those provisions are commenced, which the government expects in 2027.