GeraJobs / Contractor vs Permanent / £45,000
Contractor vs Permanent on £45,000 (2026/27)
Permanent PAYE: £35,920 net. Outside-IR35 contractor: £36,068 net — £148 more a year.
Contractor vs permanent net on £45,000 in the UK (2026/27)?
At £45,000 equivalent income in 2026/27, a permanent employee nets £35,920 after PAYE, while an outside-IR35 contractor nets about £36,068 (£12,570 salary + dividends after 19% Corporation Tax) — £148 more. Real HMRC rates (OGL v3.0). Simplified model, not tax advice.
Gera Contractor Premium
Extra net pay contracting outside IR35 vs permanent on £45,000, before expenses and lost benefits. Real HMRC 2026/27 rates.
How this is calculatedBreakdown on £45,000
| Permanent — Income Tax | £6,486 |
| Permanent — employee NI | £2,594 |
| Permanent net | £35,920 |
| Contractor — Corporation Tax (19%) | £6,162 |
| Contractor — dividends (gross) | £26,268 |
| Contractor — dividend tax | £2,770 |
| Contractor net | £36,068 |
Contractor vs Permanent Net Calculator (2026/27)
Compare permanent PAYE take-home with an outside-IR35 contractor net (£12,570 director's salary + dividends after 19% Corporation Tax), on real HMRC 2026/27 rates.
Permanent (PAYE)
£35,920
net a year
Contractor (outside IR35)
£36,068
net a year — incl. £6,162 Corp Tax, £2,770 dividend tax
A contractor keeps £148 more a year on these figures — but loses holiday, pension, sick pay and job security, and carries accountancy and IR35 risk.
Simplified model on real HMRC 2026/27 rates. Ignores expenses, VAT, accountancy fees, pension contributions and IR35 status determination. Not personal tax or financial advice.
Other incomes
Contractor vs permanent on £45,000 — FAQ
- What does a permanent employee take home on £45,000?
- £35,920 a year after £6,486 Income Tax and £2,594 employee National Insurance under PAYE (2026/27). Source: HMRC (OGL v3.0).
- What does an outside-IR35 contractor net on £45,000 of billings?
- About £36,068 using a £12,570 director's salary plus £26,268 of dividends after £6,162 Corporation Tax (19%) and £2,770 dividend tax. This is a simplified model on real HMRC rates — it ignores expenses, VAT, accountancy fees and pension. Source: GOV.UK Corporation Tax + dividend rates (OGL v3.0).
- Is contracting worth it at £45,000?
- On these figures a contractor keeps about £148 more a year than a permanent employee, but loses paid holiday, pension contributions, sick pay and job security, and carries accountancy and IR35 risk. This is a model, not advice.
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Sources: HMRC — Income Tax + Class 1 employee NI 2026 to 2027; GOV.UK — Corporation Tax (19% small profits) + Tax on dividends (£500 allowance; 10.75% / 35.75% / 39.35%). All Open Government Licence v3.0. Simplified model — ignores expenses, VAT, accountancy fees, pension and IR35 status. Not personal tax advice.