Self-employment tax calculator
Self-employment tax for the 2026/27 UK tax year is income tax on your profits: income minus allowable expenses, plus Class 4 National Insurance at 6% on profits between £12,570 and £50,270 and 2% above that (rates checked 2026-08-28 against gov.uk). Income tax itself works exactly as it does for employees, the same £12,570 personal allowance and the same bands, so a sole trader on £40,000 of profit pays the same income tax as an employee on a £40,000 salary, but less National Insurance (6% Class 4 versus 8% Class 1). Class 2 is now treated as paid automatically from £7,105 of profit, protecting your State Pension record at no cost. There is no employer and no PAYE: you calculate, report and pay it all yourself through self-assessment, including, above £1,000 of tax, the payments-on-account advance that catches most first-year sole traders off guard. If you work for yourself as an individual it makes no difference whether you call yourself a freelancer, a contractor or a sole trader, HMRC taxes all three the same way. Working through your own limited company is genuinely different: that is corporation tax, then salary and dividends on top.
Calculator
Self-employed tax calculator
On £40,000 of profit you keep
£32,868.20 a year
£5,486.00 income tax + £1,645.80 Class 4 National Insurance = £7,131.80 to HMRC, 17.8% of profit.
The self-employed differences
| Class 4 NI (6% on £12,570–£50,270, 2% above) | £1,645.80 |
| Class 2 NI | £0, treated as paid |
| Employee Class 1 NI (for comparison, same income employed) | £2,194.40 |
Self-employment NI is cheaper than employment (6% vs 8% main rate), but there is no employer pension, sick pay or holiday behind it. Below £7,105 of profit, consider paying voluntary Class 2 to protect your State Pension record.
Tax by annual profit
Choose your annual profit to see income tax, Class 4 National Insurance and take-home pay.
What counts before the tax: expenses and the trading allowance
Tax is charged on profit, not turnover, equipment, travel, a home-office proportion, software and professional fees all come off first. If your self-employment income is under £1,000 a year, the trading allowance makes it tax-free with no return needed; above that, you can claim either the flat £1,000 allowance or actual expenses, whichever is larger, never both.
How to use the self-employed tax calculator
- 1
Enter your expected profit, which is income minus allowable expenses.
- 2
Add any employment income taxed through PAYE alongside it.
- 3
Read the income tax and Class 4 National Insurance due.
- 4
Check the payments on account, which are the two instalments HMRC will ask for.
When should you use the self-employed tax calculator?
Use it to size the bill before it arrives, including the payments on account that make a first Self Assessment larger than expected.
You are newly self-employed
The first bill often includes payments on account, so it is larger than expected.
A job plus a side business
Both incomes are taxed together, with the employment covering the allowance first.
Setting money aside for the bill
Knowing the percentage to save each month is easier than facing a January bill.
Weighing up incorporating
Comparing sole trader tax with a salary-and-dividends split is the first step.
Where to go next
- Dividend tax calculatorTo compare with taking dividends from a company.Open
- Outside IR35 calculatorTo the limited company alternative.Open
- Second job tax calculatorTo if this runs alongside employment.Open
All 51 calculators share one tested engine, so a figure from the self-employed tax calculator agrees with every other page here. See the full calculator index or the pay and tax guides.
Side hustle alongside a job?
Your employment income uses your personal allowance and lower bands first, so self-employed profits on top are taxed at your marginal rate from the first pound after the trading allowance, the same stacking logic as a second job. Class 4 NI still applies only to the profits.
Ways to keep more
- Pension contributions get full relief and reduce adjusted net income: the same £100k rules apply to profits.
- Consistent profits above roughly £50,000 are where a limited company starts to be worth comparing, run the limited company calculator on your numbers.
- Below £7,105 of profit, voluntary Class 2 at £3.65/week is the cheapest State Pension credit that exists.
Rate tables checked 28 August 2026 by Hadi against gov.uk self-employed NI rates. Assumes trading profits only; CIS, partnerships and mixed income add rules this page doesn't model.