Self Employed Tax Calculator

How self employed tax works

As a sole trader you are taxed on your profit, which is your income (turnover) minus your allowable business expenses. Your first £12,570 of profit is covered by the personal allowance, so it is tax-free. Above that, income tax is 20% up to £50,270, 40% up to £125,140 and 45% beyond. On top of income tax you pay Class 4 National Insurance: 6% on profit between £12,570 and £50,270, then 2% above £50,270 for 2026-27. Class 2 National Insurance is £0 to pay once your profit clears the £7,105 Small Profits Threshold, because you are treated as having paid it, so it is left out of the total here. These bands are for England, Wales and Northern Ireland; Scotland sets its own income tax bands, though Class 4 NI is the same across the UK.

Self Assessment tax calculator

This doubles as a Self Assessment tax calculator. Self Assessment is HMRC’s system for reporting self-employed profit and paying the income tax and Class 4 National Insurance due on it. Enter your income and expenses and the tool works out the Self Assessment bill for 2026-27, splitting it into a monthly figure to set aside and a yearly total. It also flags Payments on Account, the advance instalments HMRC asks for once your bill passes £1,000, so the January and July deadlines do not catch you out.

Sole trader and Self Assessment tax explained

Sole trader is the tax status most self-employed people and freelancers have, and Self Assessment is how you report your profit to HMRC and pay what you owe. You file a Self Assessment tax return after the 5 April year end, and the balancing payment is due by 31 January. Because the bill arrives in one go, it helps to set aside a share of every invoice as you go. This sole trader tax calculator gives you that monthly figure alongside the yearly total, so your Self Assessment bill is money you have already put aside rather than a January shock.

Employed and self-employed at the same time

Plenty of people run a side business alongside a PAYE job, and the tax works by stacking the two incomes together. You get a single £12,570 personal allowance across both, and your employer usually uses it up first through PAYE. Your self-employment profit then sits on top of your salary, so it is taxed at whatever band your combined income reaches. That means a modest salary plus a growing side income can tip part of your profit into the 40% band even if neither would on its own.

National Insurance runs on two tracks. Your job pays Class 1 NI through payroll, and your profit pays Class 4 NI through Self Assessment. You can pay both, but HMRC applies an annual maximum so you are not charged twice over on the same slice of income. You report the self-employed side on a Self Assessment return each year, and the tax already collected through PAYE is credited, so you only settle the difference. Enter just your self-employment income and expenses above to size the tax and Class 4 NI to set aside on that side.

Payments on Account catch a lot of people out

If your Self Assessment bill is more than £1,000, HMRC asks for Payments on Account: two instalments towards next year's tax, each 50% of this year's bill. The first is due by 31 January alongside your balancing payment, the second by 31 July. So in your first busy year you can face roughly 150% of the bill in one January, which is a real cash-flow shock if you have not saved for it. The fix is simple in principle: move a set share of every payment you receive into a separate tax pot as you go, so the money is already there when the deadline lands. Treat this tool as a way to size that pot, not as tax advice.

Frequently asked questions