Example result based on the prefilled values.
Contract Income
£110,000.00
Employer NI
£12,978.26
Gross Pay
£91,521.74
PAYE Tax
£24,040.70
Take-Home
£63,640.01
Continue your plan
Useful next calculations
Rates & sources2026/27 illustration
2026/27 illustrative deemed-employment-payment model. It is only for an intermediary that must make that calculation and is not a status decision or payroll result.
Source: HMRC — calculate the deemed employment payment — source checked for 2026/27 illustration.
When to use this calculator
- Before pricing a job, setting margin targets, or reviewing hiring costs.
- When you want to test sensitivity around volume, VAT, markup, or overhead changes.
- When you need a practical estimate before committing to a budget or proposal.
- When you are modelling break-even volume and want to see how it shifts as overheads or prices change.
- When you are preparing a quote and need to verify that the margin holds after materials, labour, and VAT are accounted for.
Worked example: £500/day, 220 days — deemed-payment illustration
Use these sample inputs as a quick scenario test, then change one variable at a time to compare outcomes.
Annual contract value
£110,000
5% flat deduction
£5,500
Employer NI (standard rate)
£12,978
Illustrative gross deemed pay
£91,522
PAYE Income Tax + employee NI
£27,882
Illustrative take-home
£63,640
The result is an annual planning estimate only. It excludes VAT, actual expenses, pension, umbrella fees, other income and a status decision, and should not be used to set or accept a rate.
How to read your results
Contract Income
Use this metric to compare scenarios side by side and understand how changes in the key inputs drive the final outcome. If the figure surprises you, isolate one variable at a time and rerun the calculation to identify which assumption is responsible.
Employer NI
Use this metric to compare scenarios side by side and understand how changes in the key inputs drive the final outcome. If the figure surprises you, isolate one variable at a time and rerun the calculation to identify which assumption is responsible.
Gross Pay
Use this metric to compare scenarios side by side and understand how changes in the key inputs drive the final outcome. If the figure surprises you, isolate one variable at a time and rerun the calculation to identify which assumption is responsible.
PAYE Tax
Review this figure alongside your gross income so you can understand the true cost of deductions and plan around any thresholds before the tax year closes. If the figure looks higher than expected, check whether any pension or gift-aid contributions could reduce your taxable income.
Take-Home
Use this metric to compare scenarios side by side and understand how changes in the key inputs drive the final outcome. If the figure surprises you, isolate one variable at a time and rerun the calculation to identify which assumption is responsible.
Method & assumptionsAuthoritative sources
This 2026/27 illustration starts with the daily rate and billable days you enter, removes the 5% flat deduction used in HMRC’s deemed-employment-payment method, then estimates the standard employer National Insurance cost, PAYE Income Tax and employee National Insurance. It solves the employer NI cost from the remaining annual amount above the £5,000 Secondary Threshold.
It is only a planning illustration for an intermediary that must calculate a deemed employment payment. It is not suitable where a client or agency already operates PAYE under the off-payroll working rules. It excludes VAT, actual allowable expenses, pension contributions, existing salary, student loans, tax codes, umbrella fees, Scottish rates, payroll periods and any status decision. Check HMRC guidance and obtain specialist advice before relying on it.
Common mistakes
- !Using optimistic assumptions without testing a more cautious scenario as well.
- !Comparing outputs from different tools without checking that the inputs match.
- !Treating the result as a final quote instead of a planning estimate.
- !Forgetting to include employer National Insurance contributions when modelling the true cost of a new hire.
- !Using revenue figures in place of gross profit when calculating margin percentage, which produces a misleadingly high result.
What to do next
- Try at least one more scenario with a lower price or higher cost so you can see the margin floor.
- Use the related calculators below to cross-check VAT, payroll, or break-even figures from another angle.
- Open one of the linked guides if you need more context before you finalise a quote or budget.
- If the margin is tighter than expected, identify which single input has the biggest impact and focus any negotiation there first.
- Keep a record of the assumptions behind this estimate so you can revisit and update it when costs or volumes change.
Go deeper — 2 guides reference this calculator
- 10m
UK Self-Employed Tax Guide: Self Assessment, Payments on Account, Allowable Expenses
How self-employed tax works in the UK — registering with HMRC, the Self Assessment deadline, payments on account, what you can claim, and Class 2/4 NI.
- 7m
UK Dividend Tax 2025/26: Rates, £500 Allowance & Director Strategy
UK dividend tax guide — 8.75%/33.75%/39.35% rates, the shrunken £500 allowance, and how directors should mix salary and dividends after CT changes.
Frequently asked
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