About the UK Umbrella Company Calculator
This UK umbrella company calculator shows how a contractor day rate becomes take-home pay when you work through an umbrella company. The agency pays the umbrella your full assignment rate; the umbrella keeps its weekly margin, pays the employer costs it is legally responsible for — employer National Insurance, the apprenticeship levy if it passes it on, and the employer auto-enrolment pension — and whatever is left becomes your gross salary, which is then taxed through PAYE like any other job.
It is built for inside-IR35 contractors comparing umbrella quotes, agency workers checking a payslip, and anyone weighing a day rate against a permanent salary. Because employer costs come out of the assignment rate, the gross pay on your payslip is noticeably lower than rate × days, and the calculator makes each layer visible.
Figures use 2026/27 rates for England, Wales and Northern Ireland: personal allowance £12,570 (tapered above £100,000), 20%/40%/45% income tax, employee NI at 8% between £12,570 and £50,270 and 2% above, employer NI at 15% above £5,000, the 0.5% apprenticeship levy, and pensions on qualifying earnings between £6,240 and £50,270. Holiday pay is treated as rolled up at 12.07% within gross pay, and the employee pension is deducted before tax (net pay arrangement). It is an annualised estimate — weekly PAYE can differ slightly — and Scottish income tax bands are not modelled.
With the default inputs, the take-home pay per year is £60,346.35. Change any value above to recalculate instantly.
How to use the uk umbrella company calculator
- 1Enter the day rate the agency pays the umbrella (not your own expected pay).
- 2Set the days per week and the number of weeks you expect to bill in a year.
- 3Enter the umbrella’s weekly margin from its key information document.
- 4Choose whether the levy is passed on and adjust pension percentages if needed.
- 5Read your yearly and weekly take-home pay and the full breakdown of costs.
Formula and method
The umbrella first deducts its margin from the assignment income. What remains must cover your gross pay G plus the employer costs that depend on it: employer NI at 15% of pay above the £5,000 secondary threshold, the 0.5% apprenticeship levy (if passed on) and the employer pension on qualifying earnings QE(G) — pay between £6,240 and £50,270. Because those costs grow with G, the calculator solves for the gross pay that uses the funds exactly.
Your take-home pay is then gross pay minus your pension contribution (deducted before tax under a net pay arrangement), income tax on the remainder after the £12,570 personal allowance (20% up to £37,700 of taxable income, 40% to £125,140 and 45% above, with the allowance reduced by £1 for every £2 over £100,000), and employee NI at 8% between £12,570 and £50,270 and 2% above. Holiday pay is shown as the 12.07% rolled-up share of gross pay (5.6 weeks ÷ 46.4 working weeks).
- G
- Gross taxable pay, including rolled-up holiday pay
- QE(G)
- Qualifying earnings: pay between £6,240 and £50,270
- Er% / Ee%
- Employer and employee pension rates
- Margin
- Umbrella fee per week × weeks worked
Worked examples
£450 a day, 5 days, 46 weeks, £25 margin
£103,500 of assignment income minus £1,150 margin leaves £102,350. After employer NI (£12,468), the levy (£441) and the 3% employer pension (£1,321), gross pay is about £88,120. Income tax of £21,800, NI of £3,773 and your 5% pension (£2,202) leave roughly £60,346 a year — about 58% of the assignment income.
£250 a day, no levy deduction
A £250 day rate over 46 weeks brings in £57,500. Without the levy, the umbrella can pay about £48,548 gross after its margin, employer NI and pension. Tax of £6,773, NI of £2,878 and a £2,115 pension contribution leave about £36,782.
£700 a day — into the allowance taper
At £700 a day the assignment brings in £161,000. Gross pay is about £137,904, so the whole personal allowance is lost and some income is taxed at 45%. With no personal pension contribution, take-home pay is about £84,876.
Frequently asked questions
How much of my day rate do I keep through an umbrella company?+
At typical day rates of about £250–£500, take-home pay works out at roughly 58–64% of the assignment income (see the examples above). The umbrella margin, employer National Insurance and the apprenticeship levy are taken before your gross salary is set, and then income tax and employee NI come off as with any job.
Why is employer National Insurance deducted from my rate?+
The umbrella is your legal employer, so it must pay 15% employer NI on your pay above £5,000. Because the agency only pays a fixed assignment rate, that cost is funded from the rate before your salary is calculated — it is not a deduction from your gross pay.
What is rolled-up holiday pay?+
Many umbrellas include holiday pay in every payslip at 12.07% (5.6 weeks of leave ÷ 46.4 working weeks) instead of paying you when you are off. It is part of your gross pay, so set it aside to cover unpaid weeks.
What is a typical umbrella company margin?+
Weekly margins commonly sit between about £15 and £30. From 6 April 2026 the recruitment agency (or the end client if there is no agency) is jointly liable for any PAYE an umbrella fails to pay, so reputable agencies vet umbrellas closely. Ask for the key information document, which must show the margin and every deduction.
Is umbrella take-home pay lower than a permanent salary?+
For the same headline amount, yes — because the umbrella rate has to fund employer costs and holiday pay. Compare your umbrella gross pay, not the day rate, with a permanent salary, and remember permanent staff also get paid leave and benefits.
Does this work for Scottish contractors?+
The NI, levy and pension figures apply UK-wide, but Scotland has its own income tax bands. This calculator uses the England, Wales and Northern Ireland bands, so Scottish taxpayers should expect a slightly different income tax figure.
Tax results are estimates based on published rules and simplified assumptions. They are not tax advice — check official guidance or a tax professional for your situation.