Architect contractor on £150,000

Personal Ltd Co. Outside IR35. Age 42. Pension preference: aggressive.

Every figure on this page is computed at build time by the same engines that power the live salary–dividend split, take-home and SIPP optimiser calculators. Inputs come from a single CSV row; outputs come from the engines. No static lookup tables, no hand-coded numbers.

Net cash

£61,674

Pension

£60,000

Effective rate

18.9%

Marginal rate

33.8%

How much tax does a architect contractor on £150,000 actually pay in 2026/27?

Short answer: £28,326 per year — an effective rate of 18.9% on gross company profit.

What's in that number? For a Ltd Co director the figure is the sum of five lines: corporation tax (£16,468), employer NI (£1,136), employee NI (£0), personal income tax (£0) and dividend tax (£10,723). The optimiser placed £12,570 of salary, £59,826 of dividend and £60,000 of employer pension contribution to produce that figure — the lowest total in the searched grid.

What's the marginal rate on the next £1? 33.8%. This is the number that matters for "is one more invoice worth the cost in lost benefits / extra effort?" decisions — it is always higher than the average effective rate.

How does this compare to PAYE employment at the same gross? The PAYE figure for a £150,000 salaried employee in 2026/27 is roughly £64,500 of combined income tax + employee NI. The structure-specific savings come from where the deductions sit, not whether they sit anywhere — see the contractor tax guide for the side-by-side maths.

The numbers, line by line

Optimum salary	£12,570
Optimum dividend	£59,826
Optimum pension	£60,000
Net cash (optimum)	£61,674
Net wealth (cash + pension)	£121,674
Rule-of-thumb net cash	£89,240
Rule-of-thumb net wealth	£89,240
Saving vs rule of thumb	£32,433
Effective rate on profit	18.9%
Marginal rate (next £1 dividend)	33.8%

Why this scenario is different

Compared to the closest peer profile — IT contractor at £150,000 — this scenario sits £0 higher on gross income. That moves net cash by +£0, the pension contribution by +£0, and the effective rate by +0%. The effective rate moves only modestly — both scenarios sit inside the same binding tax band. The optimiser shifts £0 of the extraction out of the dividend slice, and £0 out of pension contributions.

Questions this scenario raises

Why does the optimiser want such a large pension contribution?

Because employer pension contributions dodge three taxes simultaneously: corporation tax (deductible), employer NI (none), and personal income tax / NI / dividend tax (none until drawdown). For this row the optimiser allocates £60,000 to pension — the largest tax shelter available to a director.

Does taking a £nil salary cost me a State Pension year?

Yes, if you take £0 salary and pay no Class 2 (sole traders) or Class 3 (Ltd Co directors) you will not earn a qualifying year for that tax year. Take at least the Lower Earnings Limit (£6,500 in 2026/27) as salary to earn a qualifying year automatically. Most directors take £12,570 (full PA) anyway, well above the LEL.

Where does the BracketMath engine source its rates?

Income tax / NI / CT / dividend rates come from HMRC's published 2026/27 rate tables (gov.uk/government/publications/rates-and-allowances-income-tax). Pension rules come from FA 2004 and the FCA's consumer guidance. Historical investment returns used in the Monte Carlo engine come from a 125-year UK gilt + UK equity series stored in src/data/historical-returns.json. Every constant carries a source URL in the source code.

Are the numbers on this page computed live or pre-rendered?

They are pre-rendered at build time by running the BracketMath engine code against the inputs for this specific row. That means: zero JavaScript on the page for the calculation itself, the figures cannot drift if the engine is changed, and you can verify them by running the corresponding calculator with the same inputs.

Is the Employment Allowance available for a single-director company?

No. A company with only one director who is also the sole paid employee cannot claim the £10,500 Employment Allowance (HMRC manual ESM4017). For genuine multi-employee setups it is claimable and the optimiser can model it via the `claimEmploymentAllowance` flag.

Methodology

Income tax, National Insurance and Corporation Tax bands taken from HMRC's 2026/27 rates and allowances tables (gov.uk/.../income-tax; corporation-tax). Pension Annual Allowance and taper rules from Finance Act 2004 / 2023. Trading allowance per ITTOIA 2005 s.783A. Voluntary Class 2 figure (£179.40/yr = £3.45/wk × 52) from HMRC voluntary NI guidance.

Style: 2026/27 tax year throughout; figures rounded to whole pounds in the user-facing prose; effective rates computed as (deductions / gross). The voice is methodological — no first person, no claimed credentials, no marketing fluff.

This page is not personalised advice; for advice regulated by the FCA, consult an adviser registered with the Financial Conduct Authority. See the full disclaimer.