PAYE vs Ltd vs Umbrella
Compare your take-home pay across employment types using 2025/26 UK tax rates.
£
£15,000£200,000
Best Option
PAYE Employee
Standard employment
Gross salary£50,000
Income tax-£7,486
Employee NI-£2,994
Take home£39,520
Monthly£3,293
Effective rate: 21.0%
Ltd Company
Director salary + dividends
Contract value£50,000
Director salary£12,570
Corporation tax-£9,238
Dividend tax-£2,337
Take home£37,946
Monthly£3,162
Effective rate: 24.1%
Umbrella Company
Employed via umbrella
Contract value£50,000
Umbrella margin-£1,300
Employer NI-£5,644
Income tax-£6,097
Employee NI-£2,439
Take home£34,520
Monthly£2,877
Effective rate: 31.0%
Key Differences
- PAYE: Simplest option. Employer handles everything. You get holiday pay, sick pay, pension contributions, and employment rights.
- Ltd Company: Most tax-efficient for higher earners outside IR35. You pay yourself a small salary plus dividends. Requires admin (accounts, Companies House filings, VAT).
- Umbrella: Used when inside IR35 or for short contracts. The umbrella employs you and handles payroll. Employer NI and margin reduce your take-home significantly.
These calculations use 2025/26 UK tax rates and are for illustrative purposes only. They do not account for pension contributions, student loans, Scottish rates, expenses, or other individual circumstances. Seek professional advice for your situation.