UK Self-Employed Tax Calculator

Your estimated tax and National Insurance

Income Tax is charged progressively on your taxable income, at the same rates that apply to employed income. Class 4 National Insurance is charged separately on your self-employed profit.

• Income Tax
• Class 4 National Insurance
• Take-home income

How self-employed taxable profit is calculated

Your taxable profit is your turnover minus your allowable business expenses, or minus the £1,000 trading allowance if that reduces your profit more. Income Tax and Class 4 National Insurance are then calculated on this profit figure, not on your turnover.

Turnover versus profit

Turnover is the total amount your business brings in before any costs are deducted, sometimes called revenue or gross income. Profit is what is left after deducting your allowable business expenses. Tax is charged on profit, not turnover.

Allowable business expenses

Allowable expenses are costs incurred wholly and exclusively for your business, such as stock, equipment, business travel, and a reasonable proportion of home working costs. Personal expenses and costs not related to your business are not deductible.

The £1,000 trading allowance

The trading allowance lets you deduct £1,000 from your turnover instead of your actual business expenses. You cannot claim both; HMRC's rule is to use whichever reduces your taxable profit more, which this calculator applies automatically. If your turnover is £1,000 or less, the whole amount is exempt from Income Tax and Class 4 National Insurance.

Income Tax for sole traders

Sole traders pay Income Tax on their self-employed profit using the same Personal Allowance and tax bands as employed income. If you have other taxable income, such as employment (PAYE) income, Income Tax is calculated on your combined total.

Class 4 National Insurance

Class 4 National Insurance is charged on self-employed profit above the Lower Profits Limit (£12,570.00 for 2026/27), at 6% up to the Upper Profits Limit (£50,270.00), and 2% above that. Class 4 National Insurance does not itself build entitlement to the State Pension or other contributory benefits.

Class 2 National Insurance

Since 6 April 2024, Class 2 National Insurance is not a mandatory payment for most self-employed people. If your profit is at or above the Small Profits Threshold (£7,105.00 for 2026/27), you are treated as having paid Class 2, protecting your State Pension and other contributory benefits, with nothing to pay. This calculator never deducts Class 2 as a cost.

If your profit is below the Small Profits Threshold, Class 2 is entirely voluntary. Paying it (£3.65 a week for 2026/27) can protect your National Insurance record, but is not required.

Payments on Account

Payments on Account are advance payments towards your following year's Self Assessment bill, not extra tax on top of what you owe. They generally apply if your Self Assessment bill is over £1,000 and less than 80% of your tax was already collected at source, for example through PAYE. Each payment is normally half your previous year's Income Tax and Class 4 National Insurance bill, due by 31 January and 31 July, with any balance settled the following 31 January. Exceptions can apply, and eligibility depends on your actual circumstances.

Employed and self-employed at the same time

If you are employed and self-employed at the same time, Income Tax is calculated on your combined income from both sources, using one Personal Allowance and one set of tax bands. Class 4 National Insurance applies to your self-employed profit only; your employment income already has its own National Insurance deducted through PAYE, which this calculator does not combine or offset against Class 4.

Scotland

Scotland uses different Income Tax bands and rates from the rest of the UK, which also apply to self-employed profit. Class 4 National Insurance rates and thresholds are the same across the UK.

Sole trader versus limited company

This calculator is for sole traders, who pay Income Tax and Class 4 National Insurance on their business profit directly. Limited companies are taxed differently, through Corporation Tax on company profit and separate rules for any salary or dividends the director takes from the company. This calculator does not calculate limited-company or director taxation.

Worked examples

Figures below are for 2026/27, England, Wales or Northern Ireland, generated by this calculator's own engine.

UK tax guides for skilled migrants

If you are moving to the UK from another country and considering self-employment, these guides use this calculator alongside the NHS Pay and Salary calculators to explain UK take-home pay by country.