Self-employed tax calculator 2026/27
The self-employed tax calculator for sole traders and freelancers: enter turnover and expenses to see your Income Tax, Class 4 National Insurance, monthly take-home and exactly what to set aside for the 31 January Self Assessment bill.
Calculate your self-employed tax →How self-employed tax works
Sole traders pay Income Tax on profit — turnover minus allowable expenses — using the same bands as employees: nothing on the £12,570 Personal Allowance, then 20%, 40% and 45%. On top, Class 4 National Insurance is charged on profits above the £12,570 lower profits limit (6% up to £50,270, then 2%). Mandatory Class 2 NI was abolished in April 2024 — profits above the £7,105 Small Profits Threshold get the State Pension credit automatically.
Nothing is deducted at source, so the whole bill arrives through Self Assessment — and once it passes £1,000, HMRC adds advance payments on account each January and July.
The 31 January Self Assessment deadline
Every sole trader's year ends the same way: register with HMRC by 5 October after your first year, file online and pay by 31 January, then make a second payment on account by 31 July if your bill is over £1,000. The first January is the shock — the balancing payment for last year plus 50% of it again towards the current year, effectively 150% of one year's tax in a single payment.
Our payments on account guide walks through a worked example and shows how to reduce the payments if your income falls.
Take-home pay at common profit levels
Wondering what a given profit leaves in your pocket? These are the most-looked-up profit levels, each with a full tax breakdown:
Keeping records and filing
HMRC requires records of all income and allowable expenses for at least five years. Most sole traders use bookkeeping or accounting software to log invoices, capture receipts and watch the tax bill build in real time — and Making Tax Digital for Income Tax makes compatible software mandatory from April 2026 once self-employed income passes £50,000 (dropping to £30,000 in April 2027). An accountant can handle the whole return, and is usually worth the fee once affairs get more complex than a single trade.
Employed or self-employed?
On the same headline income, a sole trader keeps slightly more each month — Class 4 NI at 6% undercuts employee Class 1 NI at 8% — but employees get employer pension contributions, paid holiday and sick pay that never appear in take-home comparisons. See the full side-by-side numbers in our employed vs self-employed comparison.
Frequently asked questions
How much tax do I pay as a sole trader?
Income Tax on profits above the £12,570 Personal Allowance at 20%, 40% and 45%, plus Class 4 National Insurance of 6% on profits between £12,570 and £50,270 and 2% above. The calculator gives your total bill, effective rate and monthly take-home.
How much should I set aside for my tax bill?
A reliable rule is to move your effective tax rate — typically 20–30% of profit for basic-rate sole traders — into a separate account every time you get paid. The calculator shows your exact monthly set-aside, and the take-home by profit table lists common levels.
What are payments on account?
If your Self Assessment bill exceeds £1,000, HMRC usually asks for two advance payments towards next year's tax — 50% each by 31 January and 31 July — on top of the current year's balance. See the payments on account guide.
Do I still pay Class 2 National Insurance?
No — mandatory Class 2 NI was abolished from April 2024. If your profits are above the £7,105 Small Profits Threshold you receive the National Insurance credit that protects your State Pension automatically; below it, Class 2 can be paid voluntarily.
What expenses can I deduct?
Allowable expenses include equipment, travel, office and home-office costs, professional fees, insurance and marketing — anything incurred wholly and exclusively for the business. If expenses are under £1,000, the flat £1,000 trading allowance is simpler and often better.
When do I need to register for Self Assessment?
By 5 October after the end of your first tax year of self-employment. The return and payment are then due by the following 31 January.