Tax Calculate

    Self-Employed Tax Calculator UK 2026/27

    Business Details

    Enter your business details to calculate your tax liability

    How Much Tax Will I Pay Self-Employed?

    Your self-employed tax bill is based on net profit, not total turnover. Net profit is your business income minus allowable expenses. The calculator above estimates Income Tax, Class 4 National Insurance, total tax, annual take-home pay and monthly net income for the 2026/27 tax year.

    The figures below use the standard Personal Allowance of £12,570, Class 4 NI at 6% between £12,570 and £50,270, and 2% above £50,270. They assume no other income, no student loan, and no pension contribution.

    Net profit

    £15,000

    Income Tax£486
    Class 4 NI£146
    Total tax£632
    Take-home£14,368
    Effective rate4.2%

    Net profit

    £20,000

    Income Tax£1,486
    Class 4 NI£446
    Total tax£1,932
    Take-home£18,068
    Effective rate9.7%

    Net profit

    £25,000

    Income Tax£2,486
    Class 4 NI£746
    Total tax£3,232
    Take-home£21,768
    Effective rate12.9%

    Net profit

    £30,000

    Income Tax£3,486
    Class 4 NI£1,046
    Total tax£4,532
    Take-home£25,468
    Effective rate15.1%

    Net profit

    £40,000

    Income Tax£5,486
    Class 4 NI£1,646
    Total tax£7,132
    Take-home£32,868
    Effective rate17.8%

    Net profit

    £50,000

    Income Tax£7,486
    Class 4 NI£2,246
    Total tax£9,732
    Take-home£40,268
    Effective rate19.5%

    Net profit

    £60,000

    Income Tax£11,432
    Class 4 NI£2,457
    Total tax£13,889
    Take-home£46,111
    Effective rate23.1%

    Net profit

    £75,000

    Income Tax£17,432
    Class 4 NI£2,757
    Total tax£20,189
    Take-home£54,811
    Effective rate26.9%

    Use these as quick reference figures only. Enter your own income and expenses in the calculator for a more relevant estimate.

    Self Assessment Tax Calculator for Self-Employed Workers

    Self-employed people usually pay tax through Self Assessment. Your calculator result shows the Income Tax and National Insurance you should plan for when filing your tax return.

    Key Self Assessment Dates for the 2026/27 Tax Year

    5 October 2027
    Register for Self Assessment if newly self-employed in 2026/27.
    31 October 2027
    Paper tax return deadline for 2026/27.
    31 January 2028
    Online tax return and balancing payment deadline.
    31 July 2028
    Second payment on account for 2027/28, if applicable.

    Payments on account can surprise new sole traders. If your Self Assessment bill is more than £1,000, HMRC may ask for advance payments towards the following year. Setting aside a percentage of each payment as it arrives makes the January deadline easier to manage.

    Self-Employed Tax Obligations

    Class 2 National Insurance

    • No compulsory Class 2 charge for most self-employed people
    • Credits are treated as paid if profits exceed £7,105
    • Counts towards state pension and benefits

    Class 4 National Insurance

    • 6% on profits £12,570 - £50,270
    • 2% on profits above £50,270
    • No contributions below £12,570

    Allowable Business Expenses

    Office & Equipment

    • • Office supplies and stationery
    • • Computer equipment and software
    • • Phone and internet costs
    • • Postage and delivery

    Travel & Vehicles

    • • Business mileage (45p/25p per mile)
    • • Public transport for business
    • • Hotel and accommodation
    • • Parking (not fines)

    Professional Costs

    • • Accountancy and legal fees
    • • Professional subscriptions
    • • Insurance premiums
    • • Marketing and advertising

    Self-Employed Tax Calculation Examples

    Example 1: Basic Rate Self-Employed Tradesperson

    Mark is a self-employed electrician with turnover of £55,000 and business expenses of £15,000, giving net profit of £40,000.

    Tax ComponentCalculationAmount
    Gross turnover-£55,000
    Business expensesMaterials, van, tools, insurance-£15,000
    Net profit-£40,000
    Personal allowanceTax-free£12,570
    Taxable profit£40,000 - £12,570£27,430
    Income tax (basic rate 20%)£27,430 × 20%£5,486
    Class 2 NINo charge for 2026/27£0
    Class 4 NI (6%)(£40,000 - £12,570) × 6%£1,646
    Total tax & NI-£7,132
    Net income after tax£40,000 - £7,132£32,868
    Effective tax rate£7,132 ÷ £40,00017.8%

    Mark keeps £32,868 from his £40,000 profit. His effective tax rate of 17.8% is lower than his marginal rate because the personal allowance is tax-free and business expenses are deducted before tax. Construction subcontractors can also use our CIS tax deduction calculator to check deductions taken at source.

    Example 2: Higher Rate Self-Employed Consultant

    Lisa is a self-employed IT consultant with net profit of £75,000 after expenses. She pays both basic and higher rate tax.

    Tax ComponentCalculationAmount
    Net profitAfter expenses£75,000
    Personal allowanceTax-free£12,570
    Basic rate band (20%)£37,700 × 20%£7,540
    Higher rate band (40%)(£75,000 - £50,270) × 40%£9,892
    Total income tax-£17,432
    Class 4 NI (6% on £12,570-£50,270)£37,700 × 6%£2,262
    Class 4 NI (2% above £50,270)(£75,000 - £50,270) × 2%£495
    Total tax & NI-£20,189
    Net income after tax£75,000 - £20,189£54,811
    Effective tax rate£20,189 ÷ £75,00026.9%

    Lisa pays higher rate tax on profits above £50,270. At this income level, she might consider forming a limited company to reduce her tax bill through dividends.

    Example 3: Sole Trader vs Limited Company Comparison

    Alex has net profit of £60,000. Let's compare tax as a sole trader vs taking a small salary plus dividends from a limited company.

    DescriptionSole TraderLimited Company
    Net profit / Company profit£60,000£60,000
    Salary takenN/A£12,570
    Corporation tax (19%)N/A£9,012
    Available for dividendsN/A£38,418
    Dividend taxN/A£2,795
    Income tax£11,432£0
    Class 4 NI£2,457N/A
    Total tax paid£13,889£11,807
    Tax saved as Ltd£2,082 per year

    At £60,000 profit, Alex could save approximately £2,082 per year as a limited company. However, this does not account for accountancy fees, extra administration, or whether company trading is right for the business.

    HMRC Simplified Expenses Rates

    Instead of tracking actual costs, you can use these HMRC flat rates for certain expenses.

    Vehicle Expenses (per mile)

    First 10,000 miles45p
    Above 10,000 miles25p
    Motorcycle (any miles)24p
    Bicycle (any miles)20p

    Working From Home (per month)

    25-50 hours/month£10
    51-100 hours/month£18
    101+ hours/month£26

    8 Ways to Legally Reduce Your Self-Employed Tax

    1

    Claim All Allowable Expenses

    Don't miss legitimate expenses like home office costs, professional subscriptions, phone bills (business portion), training courses, and software subscriptions.

    2

    Contribute to a Pension

    Pension contributions reduce your taxable profit. Contribute up to £60,000/year (or 100% of earnings) and get tax relief at your highest marginal rate.

    3

    Time Your Income and Expenses

    If approaching year-end, delay invoicing or bring forward expenses to shift income between tax years and potentially stay in a lower tax band.

    4

    Use Capital Allowances

    The Annual Investment Allowance (AIA) lets you deduct 100% of qualifying equipment costs up to £1 million in the year of purchase.

    5

    Consider Incorporation

    At higher profit levels (typically £50,000+), forming a limited company and taking salary plus dividends can reduce your overall tax bill significantly.

    6

    Employ Family Members

    Pay family members a genuine wage for genuine work. This shifts income to their lower tax bands and creates allowable business expenses.

    7

    Use Your ISA Allowance

    Save profits in an ISA (£20,000/year limit) to shelter investment returns from future tax. Won't reduce current tax but protects future growth.

    8

    Register for VAT Strategically

    If you sell to VAT-registered businesses, voluntary VAT registration lets you reclaim VAT on purchases. Consider the Flat Rate Scheme for simplicity.

    5 Common Self-Employed Tax Mistakes to Avoid

    1. Not Saving for Tax

    Many self-employed people spend their income without setting aside money for tax. Put aside a regular percentage of profit in a separate account to avoid January payment shock.

    2. Mixing Personal and Business Finances

    Using one bank account for everything makes bookkeeping difficult and increases risk of missing deductions. Open a separate business account, even if just a personal account used only for business.

    3. Claiming Non-Allowable Expenses

    You can't claim personal expenses, fines, or clothing (unless uniforms). Overclaiming triggers HMRC investigations. When in doubt, check HMRC guidance or ask an accountant.

    4. Forgetting Payments on Account

    Your second year's tax bill includes 50% advance payment for next year. If your tax was £4,000, you'll pay £6,000 (£4,000 + £2,000 payment on account). Budget for this from day one.

    5. Poor Record-Keeping

    Without receipts and records, you can't prove expenses. HMRC can disallow claims and add penalties. Use accounting software or even a simple spreadsheet to track everything from day one.

    Self-Employed National Insurance Explained

    NI ClassRate 2026/27When You PayWhat It Provides
    Class 2£0 compulsory chargeCredits treated as paid above £7,105Credits towards State Pension, Maternity Allowance, Bereavement Support
    Class 4 (Lower)6%Profits £12,570 - £50,270No additional benefits - purely tax
    Class 4 (Upper)2%Profits above £50,270No additional benefits - purely tax

    For 2026/27, most self-employed people do not pay a separate compulsory Class 2 NI charge. If profits are above the Small Profits Threshold, Class 2 credits are treated as paid for benefit entitlement purposes.

    New Self-Employed Checklist

    Immediate Actions

    • ☐ Register for Self Assessment with HMRC
    • ☐ Open a separate business bank account
    • ☐ Set up a record-keeping system
    • ☐ Start setting aside money from each payment for tax
    • ☐ Get business insurance if needed

    Ongoing Requirements

    • ☐ Keep all receipts and invoices
    • ☐ Track business mileage
    • ☐ Monitor turnover for VAT threshold
    • ☐ File tax return by 31 January
    • ☐ Pay tax on time (31 Jan & 31 Jul)

    Frequently Asked Questions

    How much tax do I pay if I'm self-employed in the UK?+
    Self-employed people pay Income Tax on taxable profits above the Personal Allowance, plus Class 4 National Insurance. For 2026/27, Class 4 NI is 6% on profits between £12,570 and £50,270, then 2% above £50,270. For example, a £20,000 net profit gives an estimated total tax and NI bill of about £1,932, leaving around £18,068 before any other deductions.
    How do I calculate self-employed tax and National Insurance?+
    Start with business income, subtract allowable business expenses, then calculate Income Tax and Class 4 National Insurance on the remaining profit. The calculator above does this by estimating taxable profit, Income Tax, Class 4 NI, total tax, annual take-home pay, and monthly net income.
    Is this a sole trader tax calculator?+
    Yes. This calculator is designed for sole traders, freelancers, contractors, and other self-employed people who report profits through Self Assessment. It estimates Income Tax and self-employed National Insurance rather than PAYE deductions.
    What expenses can I claim as self-employed?+
    You can claim expenses that are wholly and exclusively for business purposes: office costs, travel (not home to regular workplace), professional fees, business insurance, equipment, marketing, staff costs, and use of home as office. Keep all receipts and records for at least 6 years.
    Do I need to register for Self Assessment?+
    Yes, you must register for Self Assessment as soon as you become self-employed or by 5 October after the tax year you started. Failure to register on time can result in penalties. You'll need to file a tax return annually by 31 January and pay any tax due.
    How do I pay tax as self-employed?+
    Self-employed tax is paid through Self Assessment. You file an annual tax return by 31 January, and pay tax in two installments called 'payments on account' (31 January and 31 July), plus a balancing payment if needed. First-year self-employed individuals only make one payment.
    Can I use simplified expenses instead of actual costs?+
    Yes, you can use HMRC's simplified expenses (flat rates) for vehicle costs, working from home, and business premises in your home. For example, home working is £10-£26 per month depending on hours. This saves record-keeping but may not always be the most tax-efficient option.
    What is the difference between Class 2 and Class 4 National Insurance?+
    Class 2 NI protects your National Insurance record. From 2026/27, it is not a compulsory charge for most self-employed people; if profits exceed £7,105, credits are treated as paid automatically. Class 4 NI is the profit-based charge paid through Self Assessment at 6% on profits between £12,570 and £50,270, then 2% above £50,270.
    Do I pay National Insurance if I'm employed and self-employed?+
    You may pay Class 1 National Insurance on employment earnings and Class 4 National Insurance on self-employed profits. There are annual maximum contribution rules, so the final position can depend on your combined income. Class 2 credits are treated as paid automatically if self-employed profits exceed £7,105.
    What records do I need to keep as self-employed?+
    Keep records of all business income and expenses, including invoices, receipts, bank statements, mileage logs, and use of home calculations. Records must be kept for at least 6 years from the end of the tax year they relate to. Digital or paper records are acceptable.
    Should I register as a sole trader or limited company?+
    Sole trader is simpler with less paperwork, but you're personally liable for debts. A limited company offers limited liability and can be more tax-efficient for profits over £50,000 (pay corporation tax at 19-25% plus dividends tax instead of higher rate income tax). Consider your profit level, liability concerns, and administrative burden.
    How do pension contributions work for self-employed people?+
    Self-employed individuals can contribute to a personal pension and claim tax relief. You get basic rate relief automatically (contributions treated as already having 20% tax relief). Higher/additional rate taxpayers claim the extra relief through Self Assessment. Annual allowance is £60,000 or 100% of earnings, whichever is lower.
    What is Making Tax Digital for the self-employed?+
    Making Tax Digital (MTD) requires self-employed individuals with qualifying income over £50,000 from April 2026 to keep digital records and submit quarterly updates using compatible software. The threshold will drop to £30,000 from April 2027. You'll need MTD-compatible accounting software rather than spreadsheets.
    Can I claim the Trading Allowance instead of actual expenses?+
    Yes, if your self-employed income is under £1,000 annually, you don't need to declare it or pay tax. For income over £1,000, you can claim the £1,000 trading allowance instead of deducting actual expenses, which is simpler if your expenses are low. You can't claim both the allowance and actual expenses.
    What happens if I make a loss in my self-employed business?+
    Self-employed losses can be carried forward to offset against future profits from the same business, or set against other income in the same tax year (reducing your overall tax bill). Losses can also be carried back one year. You must report losses in your Self Assessment to claim relief.
    Do I need to register for VAT as self-employed?+
    You must register for VAT if your VAT-taxable turnover exceeds £90,000 (2026/27 threshold) in any 12-month period, or if you expect it to exceed the threshold in the next 30 days. You can voluntarily register below this threshold if it benefits your business (e.g., to reclaim VAT on purchases).
    How do payments on account work for self-employed tax?+
    Payments on account are advance payments towards next year's tax bill, each equal to 50% of your previous year's tax. If your tax bill was £3,000, you'd pay two payments on account of £1,500 each (31 January and 31 July). You can reduce payments on account if you expect lower income.
    What penalties apply for late Self Assessment filing or payment?+
    Late filing attracts an automatic £100 penalty, rising to £10/day after 3 months, and potentially further penalties after 6 and 12 months. Late payment incurs 5% surcharges at 30 days, 6 months, and 12 months, plus daily interest. File and pay on time to avoid these costs.

    Related Tax Calculators

    Self-employed income often overlaps with side work, VAT, pensions and company structures, so these are the most natural follow-up checks. use the side hustle tax calculator for smaller second incomes, use the VAT calculator if turnover is approaching registration levels and use the corporation tax calculator when comparing sole trader and company profit.

    Income Tax
    Calculate PAYE take-home pay
    National Insurance
    Employee & employer NI contributions
    Side Hustle
    Tax on secondary income