Saving Tool UK

Self-Employed Tax Calculator 2026/27

Calculate income tax, Class 2 and Class 4 National Insurance, and your net take-home as a sole trader. Enter your turnover, allowable expenses and pension contributions for an instant breakdown.

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Quick estimate

Taxable profit£45,000
Total tax bill£8,432
Take-home£36,568

Your take-home pay

£36,568a year

£3,047 a month, after Income Tax and National Insurance

Out of £50,000 income before expenses

  • Take-home pay£36,56873.1%
  • Business expenses£5,00010.0%
  • National InsuranceClass 4£1,9463.9%
  • Income Tax£6,48613.0%
Taxable profit
£45,000
after expenses and pension
Tax bill
£8,432
Income Tax and NI
Effective rate
18.7%
of taxable profit
Set aside for tax
£703
a month

HMRC 2026/27 rates and thresholds.

Tax breakdown

Income Tax and Class 4 National Insurance on your £45,000 taxable profit, band by band.

BandRateTaxed amountTax
Income Tax
Personal Allowance (up to £12,570)0%£12,570£0
Basic Rate (£12,571 – £50,270)20%£32,430£6,486
Higher Rate (£50,271 – £125,140)40%£0£0
Additional Rate (above £125,140)45%£0£0
Class 2 National Insurance
Treated as paid (no payment needed)£0
Class 4 National Insurance
6% on profits £12,570 – £50,2706%£32,430£1,946
2% on profits above £50,2702%£0£0
Tax bill£8,432

How tax grows with your profit

Take-home pay above the line, National Insurance and Income Tax below, at each £10,000 of taxable profit. The share taken in tax rises as profit moves into higher bands.

  • Take-home pay
  • National Insurance
  • Income Tax

Self-employed tax compared with PAYE

When you are employed, your employer takes Income Tax and National Insurance (NI) off your pay before you receive it. As a self-employed sole trader nothing is taken off automatically: you work out and pay your own tax through Self Assessment. The main differences are:

  • You pay Class 4 NI instead of the Class 1 NI an employer would deduct, and Class 4 rates are generally lower. Class 2 NI is no longer payable if your profits are above the Small Profits Threshold (£7,105): it is treated as paid, so you still build up State Pension entitlement.
  • An employer would normally pay employer NI on top of your salary, but this doesn't apply when you are self-employed.
  • Tax is paid in arrears through Self Assessment, not as you go through payroll.

Payments on account

HMRC uses payments on account to collect tax in advance for the following year. If your Self Assessment bill is over £1,000, you will usually make two advance payments towards the next year's bill:

  • 31 January: first payment on account (50% of the previous year's bill), plus any balance owed for the previous tax year
  • 31 July: second payment on account (another 50% of the previous year's bill)

In your first year of self-employment you pay your full tax bill on 31 January plus the first payment on account, so set aside enough to cover 150% of your first year's estimated tax.

Allowable business expenses

You can deduct allowable expenses from your income to reduce your taxable profit. Common examples for sole traders include:

  • Office costs (stationery, computer equipment, software)
  • Travel costs (fuel, parking, train fares, but not commuting to a fixed workplace)
  • Home working costs (a share of heating, electricity and broadband)
  • Professional fees (accountant, solicitor, professional memberships)
  • Marketing and advertising
  • Stock, raw materials and tools
  • Business insurance and bank charges

Personal expenses can't be deducted. If something is used partly for business and partly personally (a phone, for example), you can only deduct the business share.

Self Assessment deadlines

  • 5 October: register for Self Assessment if you are self-employed for the first time
  • 31 October: deadline for a paper tax return
  • 31 January: deadline for an online tax return and paying any tax owed, plus the first payment on account
  • 31 July: deadline for the second payment on account

Missing the 31 January deadline means an automatic £100 penalty, with further penalties if the return stays late.

Notes

  • Rates and thresholds are for the 2026/27 tax year (6 April 2026 to 5 April 2027).
  • The Class 4 NI main rate is 6%, following the cut from 9% in April 2024.
  • This calculator covers sole trader income only. Different rules apply to partnerships and limited companies.
  • Pension contributions are assumed to be personal contributions paid gross (for example into a SIPP), which reduce your taxable profit.
  • The profit chart assumes no expenses or pension contributions, so each column is the tax on that amount of taxable profit.
  • This calculator provides estimates and does not constitute financial or tax advice. Consult a qualified accountant or tax adviser for personalised guidance.

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