Useful next calculations
Rates and sources, 2026/27 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.
| Band or figure | Rate |
|---|---|
| Flat deduction modelled | 5% of contract income |
| Employer NI | 15% above £5,000 |
| Employee NI | 8% then 2% |
| PAYE operated by fee payer | not modelled |
Source: HMRC — calculate the deemed employment payment. Source checked for 2026/27 illustration.
When to use this calculator
- Before accepting a pay change, bonus, pension contribution or salary-sacrifice option.
- When you want a simple take-home estimate before payroll or filing.
- When you are approaching the £100,000 income level and want to see the personal allowance taper.
- When you need to convert between hourly, monthly and annual pay.
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.
| Input | Value |
|---|---|
| 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
PAYE Tax
Review this figure alongside your gross income so you can understand deductions before the tax year closes. It is a planning estimate, not a filed return.
Method & assumptions
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
- Entering gross income when you really want take-home pay, or vice versa.
- Ignoring pension contributions, deductions or local tax rules that change the result.
- Comparing monthly and annual figures without standardising them first.
- Overlooking National Insurance or student-loan plan differences that apply to you.
What to do next
- Check the same scenario with related pay or deduction calculators.
- Keep a copy of the assumptions so you can compare the next tax year or pay period.
- If you are self-employed, compare this result with the self-employment tax calculator.
- Check whether a small pension contribution change moves take-home pay more than you expect.
Guides that use this calculator
- UK Self-Employed Tax Guide: Self Assessment, Payments on Account, Allowable ExpensesHow 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.
- UK Dividend Tax 2026/27: Rates, £500 Allowance & Director StrategyUK dividend tax guide — 10.75%/35.75%/39.35% rates for 2026/27, the £500 allowance, and how directors should mix salary and dividends after CT changes.