Self-Employed Tax Calculator (UK)
Working for yourself means taking responsibility for your own tax. Sole traders must calculate and pay self-employed tax through Self Assessment, including Income Tax and Class 4 National Insurance (Class 2 is now voluntary).
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A common misconception is that self-employed tax works like employee tax. You pay NI at different rates and must make payments on account – paying roughly half your annual bill in January and July. Many first-time freelancers are caught out by this.
Knowing your estimated tax bill in advance helps you set aside the right amount each month. Enter your annual profit below to see a breakdown for the current tax year.
Self-Employed Tax Calculator
Your net profit after business expenses
Rates updated for 6 April 2026
Employment income, rental income, etc.
Personal pension contributions get tax relief
What this means for your self-assessment bill
Sole traders pay Income Tax plus Class 4 NI at 6% on profits between £12,570 and £50,270, then 2% above. There's no employer hiding part of the bill — it all comes out of your pocket, and HMRC wants it through Self Assessment by 31 January (with a payment on account due in July).
Once profits push above ~£40,000, it's worth modelling whether a limited company structure would be more tax-efficient. Dividend tax rates went up in April 2026, which has narrowed the gap, but Corporation Tax + dividends can still beat sole-trader rates at higher profit levels.
How Self-Employed Tax Is Calculated
When you're self-employed in the UK, your tax is based on your net profit—that's your total income minus allowable business expenses. Unlike employees, you're responsible for calculating and paying your own tax through Self Assessment.
Step 1: Calculate Profit
Total income minus business expenses equals your taxable profit.
Step 2: Apply Allowances
Deduct your personal allowance and any pension contributions.
Step 3: Calculate Tax & NI
Apply Income Tax rates plus Class 4 NI (Class 2 is voluntary).
Income Tax vs National Insurance
Income Tax
Income Tax applies to all your taxable income above the personal allowance (£12,570).
- Personal Allowance (£0 - £12,570)0%
- Basic Rate (£12,571 - £50,270)20%
- Higher Rate (£50,271 - £125,140)40%
- Additional Rate (over £125,140)45%
National Insurance (Self-Employed)
Self-employed people have two classes of NI—Class 4, which is charged on profits, and Class 2, which is now voluntary.
Class 2 NI (Voluntary)
No longer charged automatically. Available voluntarily at £3.65/week to protect State Pension credits. Those with profits above £7,105 get NI credits automatically.
Class 4 NI
6% on profits between £12,570 and £50,270, then 2% above that. Payable with your tax bill.
Payment on Account Explained
If your Self Assessment tax bill is more than £1,000, HMRC requires you to make payments on account. These are advance payments towards next year's tax bill, based on the assumption you'll earn a similar amount.
First Payment: 31 January
Pay your balancing payment for the previous tax year, plus 50% of next year's estimated bill.
Second Payment: 31 July
Pay the remaining 50% of the estimated bill for the current tax year.
Tip: If you expect to earn significantly less next year, you can apply to reduce your payments on account. But be careful—if you reduce them too much, you may face interest charges.
Worked Example
Let's say you're a freelance consultant with annual profit of £45,000 in the 2026/27 tax year:
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