Self-Employed Tax Calculator United Kingdom

When you are self-employed, nobody deducts tax before you are paid, so you have to work out what you owe and set it aside. This calculator turns a sole trader’s annual profit into the two amounts HMRC will want for 2026/27, Income Tax and Class 4 National Insurance, plus the voluntary Class 2 decision for low profits. Enter your profit to see the bill, the split and the profit you keep.

Profit, not turnover

You pay tax on what is left after allowable business expenses, such as stock, tools, software, mileage and a share of home costs, not on the money that came in. Work out your profit (income minus allowable expenses) and enter that. If your total self-employed income for the year is £1,000 or less, the trading allowance makes it tax-free and you may not need to register for Self Assessment, which is why very small profits show no tax here.

Income Tax on your profit

Your profit is taxed as part of your total income for the year. The personal allowance is tax-free; above it, profit is taxed at the basic rate, then the higher rate, then the additional rate. Above £100,000 of total income the personal allowance is gradually withdrawn, which the calculator includes. Because tax is banded, your effective rate (total tax divided by profit) is always lower than your top band. A sole trader with £40,000 of profit pays Income Tax only at the basic rate, and an effective Income Tax rate well under 20%.

Class 4 National Insurance

The self-employed also pay Class 4 National Insurance on profit: a main rate between the lower and upper profits limits, and a lower rate above the upper limit. It is collected through Self Assessment with your Income Tax, so the two arrive as one bill in January, along with a payment on account for the following year. The calculator adds Class 4 to your Income Tax to give the total to put aside.

Class 2 and your State Pension

Class 2 National Insurance used to be a flat weekly charge. Now, if your profit is above the small profits threshold, Class 2 is treated as paid and costs nothing, while still building the National Insurance record that counts towards your State Pension. Below the threshold you can pay Class 2 voluntarily at the weekly rate to keep the year qualifying. The calculator shows that figure separately because it is a choice, not part of your tax bill, and in many low-profit years it is good value for protecting a future State Pension.

A worked example

Take a sole trader with £40,000 of profit and no other income. After the personal allowance, £27,430 is taxable, all in the basic rate band, so Income Tax is about £5,486. Class 4 National Insurance adds about £1,646. The total to set aside is about £7,132, an effective rate of just under 18%, leaving take-home profit of about £32,868, or about £2,739 a month.

Now take a £20,000 side business on top of a £30,000 job. The job has used the personal allowance, so the whole £20,000 of profit is taxed at the basic rate, £4,000, plus about £446 of Class 4 on the profit above the lower limit.

How to use the calculator

Enter your annual profit after expenses. If you also have a job or other taxable income, add it under the advanced option so your profit lands in the right tax band. The result shows your Income Tax, Class 4 National Insurance, any voluntary Class 2, the total to set aside, your effective rate and your monthly take-home profit. Use it to size a tax pot as you invoice through the year, to check a Self Assessment return, or to compare staying a sole trader with incorporating.

Assumptions and limitations

This is a planning estimate, not a tax return. It uses 2026/27 rates and thresholds and the £1,000 trading allowance, and applies the personal allowance taper above £100,000. It assumes the figure you enter is profit after allowable expenses (the trading allowance is an alternative to claiming expenses, not an addition). It does not model payments on account, the marriage allowance, pension contributions that extend your basic rate band, capital allowances on equipment, losses carried forward, the Construction Industry Scheme, VAT or Making Tax Digital reporting. Scottish taxpayers have different Income Tax bands not reflected here; National Insurance is UK-wide. All rates and thresholds are stored as parameters sourced from HMRC and reviewed each tax year.

About This Self Employed Tax Calculator

Use this self employed tax calculator to get an instant, accurate estimate. The figures follow official GOV.UK guidance and every rate and threshold is kept up to date for 2026. Adjust the inputs above to match your situation, or browse all our calculators to plan your next step.