£130,000 Contractor Take-Home
Same £130,000 annualised gross — four engagement types side by side for the 2026/27 UK tax year. Based on a £565/day rate over 5 days × 46 billable weeks.
Four regimes side by side
Standard PAYE
EmployeeAnnual take-home
£80,659.90
£6,721.66 / month · 37.9% effective
Baseline
Umbrella
Inside IR35Annual take-home
£73,180.01
£6,098.33 / month · 43.7% effective
-£7,479.89 vs PAYE
Ltd Inside IR35
Inside IR35Annual take-home
£80,659.90
£6,721.66 / month · 37.9% effective
+£0.00 vs PAYE
Ltd Outside IR35
Outside IR35Annual take-home
£80,345.51
£6,695.46 / month · 38.2% effective
-£314.39 vs PAYE
Best–worst gap on the same £130,000 annualised gross: £7,479.89 per year.
Live model — adjust the assumptions
Fine-tune the day rate, umbrella margin, or Ltd overheads. Every value on this page recomputes deterministically.
See the difference
Same £565.00/day contractor. Four engagement types.
Assumes 5 days a week × 46 billable weeks, tax code 1257L, no student loans, UK 2026/27 tax year — all figures are live from the same engines that power the calculators.
- Highest net
Standard PAYE employment
PAYEAnnual take-home
£80,659.90
£6,721.66 / month
- Effective tax rate
- 37.9%
- vs. Standard PAYE
- Baseline
As if you were on payroll with the same annualised salary.
- Lowest net
Umbrella company
Inside IR35Annual take-home
£73,180.01
£6,098.33 / month
- Effective tax rate
- 43.7%
- vs. Standard PAYE
- −£7,479.89 vs PAYE
Includes £25/week margin, employer NI, apprenticeship levy — modelled like a real payslip.
Limited (Inside IR35)
Inside IR35Annual take-home
£80,659.90
£6,721.66 / month
- Effective tax rate
- 37.9%
- vs. Standard PAYE
- Baseline
PAYE-style deemed employment via the fee-payer.
Limited (Outside IR35)
Outside IR35Annual take-home
£80,345.51
£6,695.46 / month
- Effective tax rate
- 38.2%
- vs. Standard PAYE
- −£314.39 vs PAYE
NI-optimal salary + dividends, with corporation-tax marginal relief.
Gap between the best and worst option: £7,479.89 / year on the same working assumptions.
Model your own rate →If you earned £130,000 as an employee instead
On PAYE with a standard 1257L tax code and no salary sacrifice, you would take home £80,686 annually — £6,724 per month. That's the baseline the four contractor regimes above are measured against.
See the £130,000 employee pageExplore other contractor totals
Prefer to work in day-rate terms? Browse /compare/500-a-day for the day-rate view of the same comparison.
Frequently asked
Why does £130,000 take home a different amount as a contractor vs an employee?
An employee earning £130,000 pays only Income Tax and employee NI. A contractor billing the same annualised gross has to cover employer NI (15%), the apprenticeship levy (0.5%) and the umbrella's own margin (typically £1,300/yr) before PAYE — which is why the umbrella take-home is materially lower even though the "gross" number is the same. Outside IR35 through a limited company reintroduces the option of an NI-optimal salary plus dividends, subject to corporation tax with marginal relief.
What day rate corresponds to a £130,000 annual gross?
On the standard assumption of 5 working days × 46 billable weeks per year, £130,000 annualises from a day rate of £565/day. The chart above uses that day rate to compute each regime.
Which contractor regime keeps the most?
On this £130,000 scenario, Standard PAYE employment keeps the most (£80,659.90). The gap between best and worst is £7,479.89/year on the same annualised gross. IR35 status is determined by the contract and working arrangements, not by choice.
Is this financial advice?
No. Numbers are deterministic estimates from the same tax engine as the calculator, using standard 2026/27 UK assumptions (1257L tax code, £25/week umbrella margin, £1,200/year Ltd Outside IR35 overheads). Speak to an accountant for your specific situation.
Deterministic 2026/27 figures using standard contractor assumptions (£25/week umbrella margin, £1,200/year Ltd Outside IR35 overheads, NI-optimal director salary + dividends, corporation tax with marginal relief). IR35 status is determined by the contract; this tool illustrates the tax outcome per regime, not which regime applies to you. Not financial advice.