Self-Employment Tax Calculator

Self-employed tax calculator: how sole traders are taxed

If you work for yourself as a sole trader, you pay Income Tax and National Insurance on your trading profit — your business income minus allowable expenses. This self-employed tax calculator uses HMRC 2026/27 rates to estimate your total bill and your take-home profit after tax, so you know how much to set aside for your Self Assessment.

Class 2 and Class 4 National Insurance

Self-employed people pay two types of National Insurance. Class 4 NI is charged at 9% on profits between £12,570 and £50,270, then 2% on profits above £50,270. Class 2 NI is treated as paid once your profits reach the £6,725 Small Profits Threshold, protecting your entitlement to the State Pension and other benefits. The calculator applies both automatically alongside Income Tax at the basic (20%), higher (40%), and additional (45%) rates.

The £1,000 trading allowance and expenses

You can deduct a flat £1,000 trading allowance instead of itemising expenses — useful when your real costs are low. If your business expenses are higher than £1,000, deduct those instead. Pension contributions also reduce your taxable income and can bring you below key thresholds such as £60,000 (the High Income Child Benefit Charge) or £100,000 (where the 60% Personal Allowance taper bites).

Self Assessment and payments on account

You must register for Self Assessment if your self-employment income exceeds £1,000, and file your return by 31 January after the tax year ends. HMRC may also ask for payments on account — advance instalments towards next year's bill. Use this calculator to estimate the full liability before the deadline so there are no surprises.

How to calculate self-employment tax manually

Start with your trading profit — revenue minus allowable expenses or the £1,000 trading allowance. Apply Income Tax at 20%/40%/45% above the £12,570 Personal Allowance, then add Class 4 NI at 9% on profit between £12,570 and £50,270 (2% above), plus Class 2 NI of £3.70 a week if profit is at or above £6,725. For example, £40,000 profit gives roughly £5,486 Income Tax, £2,469 Class 4 NI, and £192 Class 2 NI — about £8,147 total, leaving £31,853 take-home profit. This calculator applies the same formula automatically for any profit level and region.

Sole trader vs self-employed vs employed

"Sole trader" and "self-employed" describe the same tax position — trading as an individual rather than through a limited company — so a sole trader tax calculator and a self-employed tax calculator will give you the same answer. Compared with being employed on PAYE, Class 4 and Class 2 NI are usually slightly lower than employee NI, but sole traders arrange their own pension contributions and get no statutory sick pay, holiday pay, or employer pension matching. Use the income tax calculator to compare directly against an equivalent PAYE salary.