How to use the Self-Employed Tax Calculator
- 1 Enter your turnover, the total money you received from customers in the tax year.
- 2 Enter your allowable expenses, or the £1,000 trading allowance if you use it instead.
- 3 Read the tax and NI to set aside and the share of profit it represents.
- 4 Check your profit after tax for the year and month.
Worked example
£45,000 turnover and £5,000 of expenses. Taxable profit is £40,000. Income tax is £5,486 and Class 4 National Insurance is £1,645.80, so you should set aside £7,131.80, about 17.8% of profit. You keep £32,868.20 a year, or about £2,739 a month.
Features
Income tax and NI together
Both bills that a sole trader pays through Self Assessment.
2026/27 rates
Personal allowance £12,570, bands at 20%, 40% and 45%, and Class 4 NI at 6% and 2%.
Set-aside percentage
A simple percentage of profit to move into a tax pot each month.
When to use it
New sole traders
Know how much to save from each invoice from day one.
Payments on account
Estimate the figures HMRC will use for January and July payments.
Pricing
Set rates that leave enough after tax.
Side businesses
See tax on profit when it is your only income.
Frequently asked questions
How much tax does a self-employed person pay?
Income tax on profit above the £12,570 personal allowance at 20%, 40% and 45%, plus Class 4 National Insurance at 6% between £12,570 and £50,270 and 2% above.
What are allowable expenses?
Costs incurred wholly and exclusively for the business, such as stock, materials, software, business travel, phone and a share of home costs if you work from home.
What is the trading allowance?
You can deduct a flat £1,000 instead of actual expenses. If turnover is £1,000 or less you do not need to tell HMRC.
When is tax due?
The balance for 2026/27 is due by 31 January 2028. If your bill is over £1,000 you also make payments on account toward the next year each January and July.
Do I still pay Class 2 NI?
No. Class 2 is no longer compulsory. People with profits under £6,845 can pay voluntary Class 2 to protect their State Pension record.
How much should I set aside?
Use the percentage shown. Many sole traders set aside 20% to 30% of profit, more if profit is above £50,270.
What about Making Tax Digital?
From April 2026 sole traders and landlords with income over £50,000 must keep digital records and send quarterly updates to HMRC using compatible software.
Should I become a limited company?
A company pays Corporation Tax at 19% to 25% on profit, and you then pay dividend tax on money you take out. It can save tax at higher profits but adds accounts, filing and admin costs, so compare both with an accountant.
Results are estimates based on the official rates linked above. Confirm important figures with the issuing authority or a qualified adviser before you act on them.
Reviewed by ToolsUnlocked Team · Last updated