Umbrella vs limited company: the 2026/27 comparison
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Every umbrella firm has a "compare us" calculator. This page does it differently: the numbers below come from our verified 2026/27 tax engine — the same one behind the take-home calculator — with every assumption stated, and the same maths applied both ways.
Take-home at £500 a day (220 chargeable days)
| Umbrella | Limited company | |
|---|---|---|
| Gross assignment | £110,000 | £110,000 |
| Annual take-home | £64,555 | £66,083 |
| Per month | £5,380 | £5,507 |
Take-home at £700 a day (220 chargeable days)
| Umbrella | Limited company | |
|---|---|---|
| Annual take-home | £83,465 | £87,946 |
The full cost list, both routes
Umbrella: employment costs come off the top — employer's NI (15% above £5,000 from April 2025) plus the umbrella's margin (typically £20–35/week). What's left is taxed as ordinary PAYE salary. No accounts, no filings, sometimes workplace perks.
Limited company: corporation tax at 25% on profits (19% under the small-profits threshold), your £12,570 salary, dividend tax above the £500 allowance, plus real running costs: accountancy (~£900/yr typical), business insurance, Companies House filings, and your own admin time.
Which route suits whom
- Umbrella fits inside-IR35 contracts (no choice — the fee-payer must apply deemed PAYE), first-time contractors, and anyone who values zero admin.
- Limited company fits genuine outside-IR35 contracts, multi-client working, and contractors claiming the expense deductions only a company can make. The admin is real but bounded — see the setup checklist.
The catch every comparison glosses over
The gap between the columns is not free money. Outside-IR35 rates are higher partly because you're buying your own holiday, sick pay and pension. Annualise over 46 chargeable weeks and realistic downtime before declaring the LTD route the winner — the day-rate to salary guide shows the full annualisation maths.
All figures computed from our 2026/27 engine (GOV.UK-verified bands: £12,570 personal allowance, 8%/2% employee NI, 15% employer NI above £5,000, 25% corporation tax, £500 dividend allowance). Assumptions: 220 chargeable days, rUK bands, £25/week umbrella margin, £900/yr accountancy. Verify at gov.uk.
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