Self Employed Tax Calculator, 2026/27

How this is calculated

Sole traders pay income tax on trading profit in exactly the same bands as employees pay on salary: the personal allowance, then 20% basic rate, 40% higher rate and 45% additional rate. If you have other taxable income, such as a part-time job or rental income, this calculator stacks your trading profit on top of it to find the correct marginal rate.

On top of income tax, sole traders pay Class 4 National Insurance on profits above the lower profits limit, at 6.0% up to £50,270 and 2.0% above that, collected through the same self-assessment return rather than through payroll.

The result is a combined figure that shows the true cost of trading profit once both income tax and Class 4 National Insurance are accounted for, which is usually the number sole traders actually need to budget against.

Getting from turnover to this figure

This calculator assumes you already have a net taxable profit figure. If you need to work that out from turnover and expenses, or decide between actual expenses and the trading allowance, use the self-employed profit calculator on this site first.

Losses, capital allowances and pension contributions can all reduce the profit figure used here, so it is worth finalising bookkeeping before relying on the tax figure for budgeting.

Setting money aside

Because tax on self-employment is paid well after the money is earned, often 10 months later through payments on account, many sole traders find it easier to set aside a fixed percentage of income as it comes in, ideally into a separate account, rather than calculating precisely every time.

This calculator's suggested percentage is based on the current year's profit only; it does not include payments on account for the following year, which can roughly double the January cash outflow in some circumstances.

Do sole traders pay National Insurance the same way as employees?

No. Employees pay Class 1 National Insurance through PAYE, while sole traders pay Class 4 on their profits through self-assessment, along with Class 2 in some cases, which builds state pension entitlement.

Is Class 4 National Insurance included in this figure?

Yes, this calculator adds Class 4 National Insurance to the income tax due, since both are usually paid together as part of the same self-assessment bill.

How much should I set aside from self-employed income?

This varies with profit level, but this calculator shows the effective combined rate for your figures, which is a reasonable starting percentage to set aside as income is earned through the year.

Does this include payments on account?

No, this shows the tax due for the year itself. Once that liability exceeds £1,000, HMRC usually also requires advance payments on account towards next year, covered by the payment on account calculator on this site.