First-pass contractor checker

Umbrella vs PAYE vs Limited Company Checker

Use this when a contract, role or recruiter conversation leaves you comparing three very different wrappers. It gives a first-pass take-home estimate for PAYE, an umbrella route and a simple one-person limited company, then flags the admin and IR35 risk that the cash number alone does not capture.

Important: this is a planning checker, not an IR35 determination tool. If the working practices point to inside IR35, the limited-company route can be misleading even if the first-pass take-home looks higher.

Your role and assumptions

This model keeps the tax side intentionally simple. It ignores VAT, pension design, travel relief edge cases and complex share structures.
Highest first-pass annual take-home
PAYE Difference between top and bottom route: £0
PAYE estimated take-home£0
Umbrella estimated take-home£0
Limited company estimated cash out£0
Limited company post-tax profit available as dividends£0
Lowest admin routePAYE
Main risk flagCheck IR35 and contract wording
Best first next stepCheck the tax and working-practices detail

What this means

The route with the highest first-pass cash outcome is not automatically the best route. IR35, admin effort, accounting cost and employer pension design can all matter more than a small difference in take-home.

Dividend vs salary

How this checker thinks about the three routes

PAYE is treated as the clean employment baseline. The umbrella route starts from the contract value and deducts umbrella margin plus employer-side payroll costs before estimating employee tax. The limited-company route pays a salary first, then applies corporation tax and dividend tax to the remaining profit.

Sources and assumptions

GOV.UK working through an umbrella company GOV.UK tax-code guidance GOV.UK dividend tax HMRC corporation tax rates and allowances HMRC employer rates and thresholds 2026 to 2027

This page assumes a simple one-person company with no associated companies and no complex benefit or pension structure. The corporation-tax marginal-relief estimate is a first-pass simplification for one-person planning.