£500 Day Rate After Tax UK (2026/27) — Inside vs Outside IR35

A £500/day UK contractor rate over 220 billable days generates £110,000 in annual contract revenue. Operating Outside IR35 via a Limited Company yields £70,705/year (£5,892.08/month) compared with £66,066/year (£5,505.48/month) Inside IR35 via an Umbrella company—a difference of £4,639/year.

£500/Day IR35 Metric (220 Days)	Inside IR35 (Umbrella)	Outside IR35 (Limited Company)
Gross Annual Contract Value	£110,000	£110,000
Employer NI (13.8%) & Levy	£12,996	£1,045 (on £12,570 salary)
Corporation Tax (19%–25%)	£0 (Taxed via PAYE)	£21,315
Personal Income / Dividend Tax & NI	£29,638	£15,135
Net Annual Take-Home Pay	£66,066/yr	£70,705/yr
Net Monthly Take-Home Pay	£5,505.48/mo	£5,892.08/mo

Frequently Asked Questions (2026/27 & 2027/28 UK Rules)

How much is a £500 contractor day rate after tax in the UK?

Over 220 billable days (£110,000 gross revenue), a £500 day rate yields £5,892.08 net per month (£70,705/year) Outside IR35 via a Limited Company, or £5,505.48 net per month (£66,066/year) Inside IR35 via an Umbrella company.

Why is my net pay lower Inside IR35 on £500 a day?

Inside IR35, 13.8% Employer National Insurance (£12,517) and the 0.5% Apprenticeship Levy (£479) are deducted from your assignment rate before PAYE Income Tax and Employee NI are calculated.

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