Self-Employed Tax Calculator (2026/27)

Use the self-employed tax calculator

Pop your annual profit into the tool above and it returns your Income Tax, your Class 4 National Insurance and your take-home figure for 2026/27. Profit means your turnover after you have taken off allowable business expenses, not your total invoiced income, so get that number right first.

How the calculation works

As a sole trader you pay two things on your profits: Income Tax and Class 4 National Insurance. They are worked out separately, on the same profit figure, then added together. The plain-English formula is:

Total bill = Income Tax on taxable profit + Class 4 National Insurance

First, Income Tax. Everyone gets a tax-free Personal Allowance of £12,570. You subtract that from your profit to get your taxable profit, then apply the bands: 20% on the first £37,700 of taxable profit (the basic rate), 40% on taxable profit between £37,700 and £125,140 (the higher rate), and 45% above £125,140. These are the rates for England, Wales and Northern Ireland; Scotland is different and covered below.

Second, Class 4 National Insurance. You pay nothing on profits below the Lower Profits Limit of £12,570. Between £12,570 and the Upper Profits Limit of £50,270 the rate is 6%, and above £50,270 it drops to 2%. In notation: Class 4 = 6% × (profit up to £50,270 − £12,570) + 2% × (profit above £50,270).

One important point on the Personal Allowance: if your profit (strictly, your adjusted net income) climbs above £100,000, the £12,570 allowance is cut by £1 for every £2 over that line, disappearing entirely at £125,140. That creates an effective 60% marginal rate in that band, which our 60% tax trap calculator explains in detail.

You can check the official figures at the gov.uk self-employed National Insurance page and the gov.uk Income Tax rates page.

Worked example: a freelancer on £35,000 profit

Say you are a freelance designer who invoiced £42,000 and had £7,000 of allowable expenses, leaving £35,000 profit. Here is the full sum.

• Taxable profit: £35,000 − £12,570 Personal Allowance = £22,430.
• Income Tax: all of that sits in the basic-rate band, so 20% × £22,430 = £4,486.
• Class 4 NI: 6% × (£35,000 − £12,570) = 6% × £22,430 = £1,345.80.
• Total to HMRC: £4,486 + £1,345.80 = £5,831.80.
• You keep: £35,000 − £5,831.80 = £29,168.20.

Worked example: a sole trader on £60,000 profit

Now a consultant clearing £60,000 profit, which tips into the higher-rate band.

• Taxable profit: £60,000 − £12,570 = £47,430.
• Income Tax: 20% × £37,700 = £7,540, then 40% × (£47,430 − £37,700) = 40% × £9,730 = £3,892. Total = £11,432.
• Class 4 NI: 6% × (£50,270 − £12,570) = £2,262, then 2% × (£60,000 − £50,270) = £194.60. Total = £2,456.60.
• Total bill: £11,432 + £2,456.60 = £13,888.60, leaving you £46,111.40.

Notice how the NI rate actually falls from 6% to 2% once you cross £50,270, while the Income Tax rate jumps from 20% to 40% at the same point. The two move in opposite directions, which is why your overall marginal rate as a sole trader is around 42% in the higher band, not 46%.

2026/27 rates and thresholds at a glance

Figures checked against gov.uk for the 2026/27 tax year. For a breakdown of just the Income Tax or just the NI portion, our Income Tax calculator and National Insurance calculator show each in isolation.

Self-employed tax in Scotland

If you live in Scotland, your self-employed Income Tax uses the Scottish rates and bands, which run from a 19% starter rate up to a 48% top rate, rather than the 20/40/45 structure above. The Personal Allowance of £12,570 is still UK-wide, and Class 4 National Insurance is identical across the whole UK, so only the Income Tax half changes. The Scotland tax calculator applies the Scottish bands for you.

Class 2 National Insurance: do you still pay it?

This trips a lot of people up. Since 2024/25, if your profits are at or above the Small Profits Threshold you are treated as having paid Class 2 and still build up your State Pension and benefit entitlement, but the charge itself is £0. You only pay Class 2 if you choose to, at £3.65 a week, which is usually worth it if your profits are below the threshold and you want to protect your National Insurance record. It is one of the cheapest ways to keep a qualifying year.

Ways to lower your bill (legitimately)

• Claim every allowable expense. Your tax is charged on profit, not turnover, so accurate expenses directly cut the bill. If you work from home, the use of home as office calculator helps you claim a fair proportion of household costs.
• Use pension contributions. Paying into a personal pension extends your basic-rate band and can pull income back out of the higher-rate or £100k taper zone.
• Time your invoicing. Profits are taxed in the year they arise; bunching or spreading work around 5 April can change which year a slice falls in.
• Keep a separate business account so expenses are easy to evidence if HMRC ever asks.

Common mistakes self-employed people make

The biggest shock for first-time filers is payments on account. If your bill is over £1,000, HMRC asks you to pre-pay next year's tax in two instalments: 50% with your 31 January bill and another 50% by 31 July. In your first year that can mean handing over 150% of your actual tax in one go. Our payments on account calculator shows the real cash you will need.

Other frequent slip-ups: forgetting that Class 4 NI is on top of Income Tax (so people under-save); treating turnover as profit; missing the registration deadline of 5 October after the tax year you started; and not setting money aside monthly. A safe rule of thumb is to park 25% to 30% of every payment in a separate pot. If you are weighing up going limited or staying a sole trader, compare the two routes with the PAYE vs self-employed calculator.

You report all of this through a Self Assessment return (form SA100) by midnight on 31 January following the tax year. The self assessment tax calculator walks through the whole return, including any other income.

These figures are estimates for guidance only and are not personal tax or financial advice. Your own position may differ, so check with HMRC or a qualified accountant before acting.

Related calculators

Carry on with the self assessment tax calculator, work out instalments with the payments on account calculator, or if your trade is a sideline check the side hustle tax calculator.