Is your contractor really an employee for tax?
Status depends on how the work is really done, not on the contract's label. Answer six questions for our rough view, who must decide, and what it costs you if it's inside.
Your answer
Answer the questions about how the work is done to see our view.
About this calculator
For businesses taking on a contractor who want to know whether the off-payroll working rules (IR35) are likely to apply, who has to decide, and what it would cost if the contractor should be taxed like an employee.
It's a rough view from six questions, not HMRC's Check employment status for tax (CEST) tool and not a legal decision. Status depends on the whole picture: the contract and how the work is really done day to day. It assumes you contract with the contractor directly, with no agency in between.
What happens to your answers
We don’t keep them. Your answers go to our server to do the sums and aren’t stored or logged. If you copy a link to your answers, they’re in the link itself, so only share it with people you trust.
How it’s worked out
Each answer points inside the rules, outside them, or neither. The two that count most are whether they could genuinely send someone else to do the work, and whether you control how, when and where they work. Financial risk and being treated like your staff count next; promises of more work and the length of the engagement count least. Add them up and the total leans inside, outside or is borderline.
Through their own limited company, a medium or large business, or any public body, must decide and give a status determination statement with its reasons, and answer any disagreement within 45 days. A small business leaves it to the contractor's company. For 2026/27, small means no more than 2 of: turnover over £10.2 million, balance sheet over £5.1 million, more than 50 staff. The limits rise to £15 million and £7.5 million, but HMRC says that can't change anyone's size before 2027/28.
If it's inside and the decision is yours, you're the fee-payer: you take income tax and employee National Insurance off each payment and pay employer's National Insurance at 15% (above £5,000 a year), plus the Apprenticeship Levy at 0.5% if your pay bill is over £3 million. A sole trader who's really an employee goes on your payroll whatever your size. Through an umbrella company, the umbrella runs PAYE.
Worked example
Our view: it leans inside the rules (taxed like an employee); as a medium or large business you decide, and inside the rules it would cost you about £15,750 a year.
2026/27 tax year · working through their own limited company · you contract with them directly, no agency · a medium or large business · £500 a day, 220 days, no VAT or expenses taken off · the same day rate inside the rules
| It must be them personally (personal service) | Points inside (+3) |
|---|---|
| You decide how, when and where they work | Points inside (+3) |
| They carry no financial risk: paid for their time whatever happens | Points inside (+2) |
| They're partly treated like your staff | Neither way |
| No duty to offer or take work beyond the agreed job | Points outside (−1) |
| A long engagement (over 2 years) | Points inside (+1) |
| Our score: 4 or more leans inside, −4 or less leans outside | +8: Likely inside |
| Who decides and gives the status determination statement | You |
| Fees: £500 a day × 220 days | £110,000 |
| Employer's National Insurance: 15% above £5,000 | + £15,750 |
| Extra cost to you a year if it's inside | £15,750 |
Worked out using HMRC's published rates for the 2026/27 tax year (6 April 2026 to 5 April 2027), on a yearly basis.
Questions people ask
We're a small business. Do we need to do anything?
You don't decide or pay the tax: the contractor's own company does. Check your size before each tax year, because if you become medium or large, the decision becomes yours.
Can the contract just say they're outside IR35?
No. HMRC looks at what really happens: if they can't send someone else and you control their work, a contract saying otherwise won't change the answer.
What if the contractor disagrees with our decision?
They can tell you until the last payment. You must answer within 45 days, saying whether you've changed your view and why. Keep applying your decision while you consider it.
More free calculators
Talk to us about your tax.
A free call with the team. We’ll contact you within 24 hours.