£95,000 personal income
Allowance: £12,570
Salary-only Income Tax: £25,432
Salary at standard allowance + dividends: £19,990 personal tax
Dividend example excludes Corporation Tax and company costs; it is not a like-for-like total burden.
UNDERSTAND YOUR NUMBERS
Contractor £100k Tax Trap
Explore Personal Allowance taper for salary and dividends using live tax examples.
Tax year 2026/27 · Last verified · Methodology · Official sources
Allowance taper
Loss of tax-free allowance adds tax in the taper range. Dividends can also increase adjusted net income and reduce the allowance.
Pension considerations
Qualifying personal contributions can affect adjusted net income; company contributions affect profit instead. Eligibility and allowance limits still apply.
Turnover is not the threshold
Company revenue is not personal adjusted net income. Salary, withdrawn dividends and other personal income determine personal tax.
Live examples around the taper
£100,000 personal income
Allowance: £12,570
Salary-only Income Tax: £27,432
Salary at standard allowance + dividends: £21,777 personal tax
Dividend example excludes Corporation Tax and company costs; it is not a like-for-like total burden.
£110,000 personal income
Allowance: £7,570
Salary-only Income Tax: £33,432
Salary at standard allowance + dividends: £27,602 personal tax
Dividend example excludes Corporation Tax and company costs; it is not a like-for-like total burden.
£125,140 personal income
Allowance: £0
Salary-only Income Tax: £42,516
Salary at standard allowance + dividends: £36,422 personal tax
Dividend example excludes Corporation Tax and company costs; it is not a like-for-like total burden.
Use the relevant calculator
Worked example: £600/day
220 billable days give £132,000 revenue. These figures use the same engine as your comparison.
Inside IR35
£74,423 annual cash
£121,848 cash-equivalent salary
Outside IR35
£78,666 annual cash
£133,093 cash-equivalent salary
Make it yours
England, no loans or other income. Inside: assignment rate, no margin, levy or pension. Outside: £3,000 expenses, Personal Allowance salary, no pension or retained profit. Salary comparison: 5% employee and employer pension.
Compare with your salaryHow this calculation works
Personal Allowance falls £1 for each £2 of adjusted net income above the configured threshold. Examples use England, no other income and the verified year's rates.
Important assumptions
Annual estimates, England by default, no other income or student loan. Illustrations use £3,000 company expenses, no opening reserves and a 12-month accounting period. Pension, gross benefits and retained profit are not spendable cash.
Allowance taper
Loss of tax-free allowance adds tax in the taper range. Dividends can also increase adjusted net income and reduce the allowance.
Pension considerations
Qualifying personal contributions can affect adjusted net income; company contributions affect profit instead. Eligibility and allowance limits still apply.
Turnover is not the threshold
Company revenue is not personal adjusted net income. Salary, withdrawn dividends and other personal income determine personal tax.
Frequently asked questions
Is revenue the same as take-home?
No. Employment costs, expenses and taxes can apply before money reaches you. Pension and retained profit are separate.
Can this decide IR35 status?
ContractorMoney.co.uk does not determine IR35 employment status. We model financial consequences after you select a status.
Sources and review
Tax year 2026/27 · Last verified · Methodology · Official sources
- HMRC Income Tax, NI and student-loan thresholds
- HMRC dividend tax
- HMRC Corporation Tax and marginal relief
- HMRC pension tax relief
- HMRC off-payroll working guidance
- Government umbrella-company guidance
ContractorMoney.co.uk does not determine IR35 employment status. Use HMRC's official status guidance. Estimates only, not tax, financial, legal, accounting or investment advice. Read the limitations.