How the self-employed tax calculator works
As a sole trader you pay income tax and Class 4 National Insurance on your profit, which is your turnover minus allowable expenses. Nobody takes it off for you, so you work it out through a Self Assessment tax return and pay HMRC directly. This calculator uses the 2026/27 rates for the tax year from 6 April 2026 to 5 April 2027.
If you also have a job, the calculator adds your salary and profit together to work out the income tax, then takes off the tax already collected through PAYE. What's left is the extra tax caused by your self-employment, which is what you'll pay through Self Assessment.
Self-employed tax rates for 2026/27
Income tax
You get the same £12,570 Personal Allowance as an employee. Above that, profit is taxed at 20% up to £50,270, 40% up to £125,140 and 45% above that in England, Wales and Northern Ireland. Scottish taxpayers use the six Scottish bands from 19% to 48%, which you can see on the income tax calculator.
Class 4 National Insurance
| Annual profit | Class 4 rate |
|---|---|
| Up to £12,570 (Lower Profits Limit) | 0% |
| £12,570 to £50,270 (Upper Profits Limit) | 6% |
| Over £50,270 | 2% |
Class 4 is worked out on your self-employed profit alone, even if you also earn a salary.
Class 2 National Insurance
Compulsory Class 2 contributions were abolished from 6 April 2024. If your profit is £7,105 or more (the Small Profits Threshold), you pay nothing but are treated as having paid, so the year still counts towards your State Pension. If your profit is below £7,105, you can choose to pay voluntary Class 2 at £3.65 a week (£189.80 a year) to protect your National Insurance record. That's usually far cheaper than Class 3 contributions.
Worked example: £40,000 profit
- Income tax: (£40,000 − £12,570) × 20% = £5,486
- Class 4 NI: (£40,000 − £12,570) × 6% = £1,645.80
- Total bill: £7,131.80, leaving £32,868.20 of your profit
That's about £594 a month to set aside. On £60,000 profit, the bill rises to £13,888.60: £11,432 income tax plus £2,456.60 Class 4 (£2,262 at 6% and £194.60 at 2%).
With a £30,000 salary and £20,000 of side-hustle profit, the total income tax on £50,000 is £7,486. PAYE already collects £3,486 on the salary, so you owe £4,000 of income tax plus £445.80 Class 4 through Self Assessment.
Payments on account explained
If your Self Assessment bill is £1,000 or more, HMRC normally asks for payments on account: two advance payments towards next year's bill, each half of this year's bill. They are due on 31 January and 31 July. They include Class 4 NI but not Class 2. You don't have to make them if more than 80% of your tax was collected at source, for example through PAYE.
The first year catches many people out. On £40,000 profit, by 31 January 2028 you pay the £7,131.80 bill for 2026/27 plus a first payment on account of £3,565.90 for 2027/28, so £10,697.70 in one go, followed by another £3,565.90 on 31 July 2028. Untick "first year" to see the normal pattern once you're established. If your profit falls, you can ask HMRC to reduce your payments on account.
Tips for sole traders
- Move a fixed share of every invoice into a separate savings account. Around 20% to 25% covers most basic-rate traders.
- Claim every allowable expense, or use the £1,000 trading allowance if your costs are tiny.
- Register for VAT once your turnover passes £90,000 in a rolling 12 months. The VAT calculator helps you price with and without VAT.
- File online by 31 January. Late filing costs a £100 penalty straight away, even if you owe nothing.
Frequently asked questions
How much tax do I pay if I'm self-employed and earn £30,000?
On £30,000 profit in 2026/27 you pay £3,486 income tax and £1,045.80 Class 4 National Insurance, a total of £4,531.80. You keep £25,468.20.
Do I still have to pay Class 2 National Insurance?
No. Compulsory Class 2 was abolished from April 2024. Profits of £7,105 or more get the year credited automatically, and below that you can choose to pay voluntary Class 2 at £3.65 a week to protect your State Pension.
How much should I put aside for tax when self-employed?
A basic-rate sole trader typically needs 20% to 25% of profit for income tax and Class 4 NI. On £40,000 profit the 2026/27 bill is £7,131.80, about £594 a month or 17.8% of profit.
When is the self-employed tax bill for 2026/27 due?
The online tax return and any balancing payment are due by 31 January 2028. If you make payments on account, they're due on 31 January 2027 and 31 July 2027.
Do I pay Class 4 NI if I'm also employed?
Yes. Class 4 is charged on your self-employed profit on its own, using the £12,570 and £50,270 limits, regardless of any salary from a job. Your employer still takes Class 1 NI from your wages as normal.
Last reviewed October 2026 using 2026/27 figures. This calculator gives an estimate for guidance only.