Self-employed tax calculator

How much tax will I pay if I'm self-employed?

Income tax on your profit above £12,570, plus Class 4 National Insurance. On £35,000 profit that is £4,486 income tax and £1,345.80 Class 4, £5,831.80 in all. Between £12,570 and £50,270, each pound of profit costs 26p once NI is counted (20% tax and 6% Class 4); above it, 42p.

Employed and self-employed tax calculator

HMRC adds your salary and your profit together. Your personal allowance is used by your salary first, so your self-employed profit is taxed from the first pound at your top rate. Class 4 is worked out on the profit on its own.

With a £30,000 salary and £15,000 of profit, your job pays about £3,486 tax and £1,394.40 National Insurance through PAYE. The profit adds £3,000 income tax, all at 20% because the allowance is used up, and £145.80 Class 4: £3,145.80 to pay through self assessment. Choose "Employed and self-employed" in the calculator for your own figures.

With a £48,000 salary, £10,000 of profit adds £3,546, because most of it falls in the 40% band. Class 4 is nil: the profit on its own is under £12,570.

Will your tax code change? It can: if you owe less than £3,000 and file online by 30 December, HMRC collects the bill through your PAYE code over the next year, unless you ask it not to. With a job as well, Class 4 has an annual maximum (regulation 100 of the Social Security (Contributions) Regulations 2001): the main-rate Class 1 on your pay counts against it. On a £60,000 salary that Class 1 is more than the maximum, so a £20,000 profit pays Class 4 at 2% only: £148.60, not £445.80. The calculator applies the maximum.

Do you only pay 20% tax when self-employed?

No. The first part of your profit is tax-free, then 20%, then 40% and 45% as it rises, and Class 4 National Insurance comes on top.

National Insurance for the self-employed

Class 4 is 6% on profit between £12,570 and £50,270, and 2% above. Class 2 is voluntary: worth paying at £3.65 a week if your profit is under £7,105, to keep your State Pension record. With a job as well, your salary pays Class 1 through PAYE (8% between £12,570 and £50,270, then 2%).

Payments on account, and why your first bill is bigger

If your bill is £1,000 or more and less than 80% of your tax was taken at source, HMRC asks for two payments towards next year, each half this year's bill: by 31 January and 31 July. So in your first year, the 31 January payment is the whole bill plus the first of these. On £35,000 profit: £5,831.80 plus £2,915.90, £8,747.70 by 31 January 2028, then £2,915.90 by 31 July 2028.

How much should I put aside for tax?

Your bill ÷ 12, every month, in a separate account. On £35,000 profit that is about £485.98 a month, 17% of the profit. In the first year, put aside for the payment on account too.

Who pays more tax, self-employed or employed?

On the same £40,000, an employee takes home £32,319.60 and a sole trader with £40,000 profit keeps £32,868.20: Class 4 is a little lower than employee NI. But the employee also gets an employer pension, paid holiday and sick pay, and the sole trader's £40,000 is after their costs.

What are the new tax rules for self-employed people in 2026?

Making Tax Digital for Income Tax: digital records and quarterly updates for sole traders and landlords with qualifying income over £50,000 from 6 April 2026, £30,000 from 6 April 2027, £20,000 from 6 April 2028 (GOV.UK). Class 2 has been voluntary since April 2024.

How much can I earn self-employed before I need to declare it?

Up to £1,000 a year of self-employed income is covered by the trading allowance. Above that, register for self assessment by 5 October after the tax year you started. Declaring is not the same as paying: with profit under your personal allowance, the bill can be nil.

How to file a self-employed tax return

• Register for self assessment as self-employed with HMRC, and you get a UTR (Unique Taxpayer Reference).
• Keep a record of your income and expenses, with receipts, through the year. The self-employed allowable expenses list sets out what a tradesperson can claim.
• After 5 April, fill in the return online: the main return and the self-employment pages. CIS deductions go in the self-employment section.
• File online and pay by 31 January (paper returns by 31 October). For 2026/27: by 31 January 2028.

HMRC's penalties start at £100 for a return one day late, so file on time even if you cannot pay in full, and ask HMRC about a payment plan.

Self-employed and CIS

If contractors take CIS off your pay, enter what they took in the calculator, or use the CIS tax rebate calculator, which itemises your expenses and mileage.

Self-employed and VAT

VAT is separate from income tax. You must register when your taxable turnover goes over £90,000 in any 12 months: turnover, not profit. Enter your figures in the calculator without VAT, because the VAT you charge is not your income.

Once registered, the VAT flat rate calculator shows whether the flat rate scheme beats standard VAT for your turnover and what you spend on materials.