How much tax do self-employed people pay in the UK?

Self-employed sole traders usually pay Income Tax on taxable profit and Class 4 National Insurance on profits above the Lower Profits Limit. Class 2 is usually treated as paid where profits are above the Small Profits Threshold.

Do I pay tax on turnover or profit?

You normally pay tax on profit, not turnover. Profit is turnover minus allowable business expenses, or turnover minus the trading allowance if you choose that route.

What is the GBP 1,000 trading allowance?

The trading allowance lets you deduct up to GBP 1,000 from trading income instead of claiming actual expenses. It can be helpful for small side income with low costs, but it is not always best.

When are payments on account due?

Payments on account are usually due on 31 January and 31 July. They normally apply when your Self Assessment bill is GBP 1,000 or more, unless enough tax was collected at source.

Does this calculator include student loans or VAT?

It does not calculate student loan repayments or VAT. You can enter a student loan amount calculated elsewhere as an advanced Self Assessment charge, and use the separate VAT calculators for VAT estimates.

Does the calculator include Gift Aid and pension tax relief?

Yes. The advanced section accepts net Gift Aid and qualifying relief-at-source pension payments. It grosses them up at the 20% basic rate and applies the relevant adjusted-net-income and tax-band effects.

Tax year: 2025/26 & 2026/27Jurisdiction: UK, with Scotland tax optionLast verified: July 26 2026

Self-Employed Tax Calculator

Estimate UK sole trader tax on self-employed profit, including Income Tax, Class 4 National Insurance, Class 2 NI credit status, the trading allowance and likely payments on account. It is built for freelancers, contractors, sole traders and side-hustle sellers who want a clear Self Assessment estimate before the bill lands.

Estimate your sole trader tax bill

Enter annual figures for the tax year. Use gross figures before tax for other income.

Tax year

Income Tax region

Self-employed turnover

Total sales or fees before expenses.

Allowable business expenses

Use business-only costs, not personal spending.

Expense method

The trading allowance replaces expenses and has eligibility restrictions, including income from an employer or certain connected businesses.

Other tax detailsOptional — add other income, tax reliefs or payments already madeAdvanced

Leave these at zero for a straightforward sole-trader estimate. Enter annual figures for the same tax year.

Other income and PAYE tax

Other taxable income

Employment, pension or other non-dividend income before tax.

PAYE tax already deducted

Gift Aid and personal pension payments

Gift Aid paid by you

Relief-at-source pension paid by you

Enter the amount you actually paid. The calculator grosses it up at the 20% basic rate. Do not include workplace net-pay or salary-sacrifice contributions here.

Self Assessment payments and charges

Payments on account already paid

Student loan / other SA charges

Enter the amount from another calculation or your tax-return software.

Show possible next-year payment on accountThis is a cash-flow warning only. HMRC calculates the actual statement.

Taxable profit

£0

Total Income Tax

£0

Class 4 NI

£0

Estimated balance to pay

£0

Net profit	£0
Income Tax	£0
Class 4 National Insurance	£0

Personal Allowance

£12,570

Tapers by GBP 1 for every GBP 2 of adjusted net income above GBP 100,000.

Class 4 NI

6% / 2%

6% from GBP 12,570 to GBP 50,270, then 2% above GBP 50,270.

Trading allowance

£1,000

Can replace actual expenses, but cannot create a loss.

What this self-employed tax calculator is for

This calculator is for UK sole traders and freelancers who want to estimate the tax due through Self Assessment. It focuses on the core calculation: business turnover, allowable expenses, taxable profit, Income Tax, Class 4 National Insurance and likely payments on account. The main form stays short, while the optional section lets you add the details that commonly change a mixed-income tax bill.

The useful distinction is profit versus cash received. If you invoice GBP 50,000 and spend GBP 8,500 on allowable business costs, your starting profit is GBP 41,500. Income Tax and Class 4 National Insurance are worked from that profit, then other taxable income is used to decide which tax bands your self-employed profit falls into.

If you use the advanced fields, the estimate can also take account of PAYE income and tax, qualifying Gift Aid and relief-at-source pension payments, payments on account already made, and a student loan or other charge calculated elsewhere. It is still not a full return: capital allowances, specialised income and loss-relief claims can need a more detailed calculation.

Input	Why it matters
Turnover	The total income from the trade.
Expenses	Deducted if you do not use the trading allowance.
Other income	Uses tax bands before your self-employed profit.
PAYE tax deducted	Reduces the estimated Self Assessment balance and payment-on-account relevant amount.
Gift Aid and pension	Can reduce adjusted net income and extend the relevant tax bands.
Payments already made	Reduce the remaining statement-style balance.

How this calculator works

Inputs used

Tax year, Income Tax region, self-employed turnover, allowable expenses and expense method.
Optional other taxable income, PAYE tax deducted, net Gift Aid and relief-at-source pension payments, payments on account already paid, and manual Self Assessment charges.
Official Personal Allowance, Income Tax bands, Scottish Income Tax bands, Class 4 NI rates and Class 2 Small Profits Thresholds from the shared self-employed tax engine.

Calculation method

Calculate business profit from turnover minus actual expenses, the trading allowance, or whichever eligible route gives the lower profit.
Add other non-savings, non-dividend income and apply the Personal Allowance taper using adjusted net income.
Gross up qualifying Gift Aid and relief-at-source pension payments at 20%, then apply their adjusted-net-income and tax-band effects.
Calculate Income Tax on all income entered and Class 4 National Insurance on self-employed profit only.
Show Class 2 NI credit status using the Small Profits Threshold for the selected tax year.
Deduct PAYE tax and payments on account already paid, then add any manual charge to estimate the remaining balance.
Estimate next-year payments on account from the relevant Income Tax and Class 4 amount after tax deducted at source, using the less-than-GBP-1,000 and more-than-80% exceptions.

Assumptions

Other taxable income is treated as non-savings, non-dividend income and as using tax bands before self-employed profit.
The calculator assumes the selected region applies for the full tax year.
Trading allowance is capped at turnover and cannot create or increase a trading loss.
Gift Aid and relief-at-source pension inputs are the net amounts actually paid. Annual allowance, relevant UK earnings and Gift Aid tax-cover limits are not checked.
Manual charges change the balance but are excluded from the payment-on-account calculation, in line with the treatment of student loan repayments.
Payments on account are estimated from this year's calculated Self Assessment bill. HMRC bases actual payments on your submitted return and account history.

What this does not cover

Automatic student loan calculations. Use the Student Loan Repayment Calculator, then enter its result as a manual advanced charge if appropriate.
VAT registration, VAT returns, Flat Rate Scheme calculations or import VAT. Use the VAT Calculator or VAT Flat Rate Scheme Calculator for those checks.
CIS deductions and refunds. Use the CIS Tax Rebate Calculator if construction deductions are involved.
Capital allowances, basis-period transitional rules, partnerships, foreign income, savings, dividends, loss-relief claims and High Income Child Benefit Charge.

Actual expenses or trading allowance?

If you keep receipts and your allowable business expenses are more than GBP 1,000, actual expenses will usually give the lower taxable profit. Typical costs include business software, insurance, accountancy, advertising, stock, business travel and the business proportion of phone or home-working costs.

If your costs are small, the trading allowance can be simpler. It lets you deduct up to GBP 1,000 instead of actual expenses, but it is not a magic extra allowance on top of real costs. You choose one route for that trade. If turnover is below GBP 1,000, the allowance is capped at turnover.

A quick example: turnover of GBP 6,000 with GBP 300 of expenses gives GBP 5,700 profit using actual expenses, but GBP 5,000 if you use the trading allowance. Turnover of GBP 6,000 with GBP 2,400 of genuine expenses is usually better with actual expenses.

The automatic comparison assumes you are allowed to claim the trading allowance. GOV.UK blocks it for partnership income and for some income from an employer or connected business. If actual expenses are more than turnover, the calculator keeps the resulting loss visible; it does not choose a loss-relief claim for you.

The first-year bill shock

New sole traders often save for one tax bill and then discover payments on account. If your Self Assessment bill is GBP 3,000 and payments on account apply, you may need to pay GBP 3,000 for the year just ended plus a first payment on account of GBP 1,500 by 31 January, then another GBP 1,500 by 31 July.

The calculator separates the current bill from payment-on-account estimates so you can plan cash flow. It also lets you enter PAYE tax already deducted and payments on account already paid. The next-year estimate is based on the relevant amount left after tax deducted at source. No payments are normally required if that amount is below GBP 1,000 or more than 80% of the assessed tax was collected at source.

If you expect profits to fall, you can ask HMRC to reduce payments on account, but do it carefully. If the reduction is too low, HMRC can charge interest on the shortfall.

When the advanced details matter

Income and tax reliefs

A salary or pension can use your Personal Allowance and lower tax bands before the trade profit is taxed. Qualifying Gift Aid and relief-at-source pension payments are entered as the amount you paid; the calculator grosses them up at 20% and applies the relevant tax-band and adjusted-net-income treatment.

Payments and other charges

PAYE tax and payments on account reduce the balance still due. A student loan or other charge can be entered if you already know the amount, but it is not used to inflate the next payments on account. That distinction matters when the calculator shows the possible January cash requirement. That figure assumes any overpayment stays on the Self Assessment record to meet future liabilities; asking HMRC to repay it would change the cash flow.

Class 2 and Class 4 National Insurance

Class 4

Paid on self-employed profits above GBP 12,570. The main rate is 6% up to GBP 50,270, then 2% above that.

Class 2 credit

Above the Small Profits Threshold, Class 2 is usually treated as paid, helping protect your NI record.

Voluntary Class 2

Below the threshold, you may be able to pay voluntary Class 2 to avoid gaps in your National Insurance record.

Making Tax Digital warning

Making Tax Digital for Income Tax is now a live planning issue for sole traders and landlords. GOV.UK says you need to use MTD if you are registered for Self Assessment, have self-employment or property income, and your qualifying income is above the relevant threshold.

The current staged thresholds are: over GBP 50,000 from 6 April 2026 based on 2024/25 qualifying income, over GBP 30,000 from 6 April 2027 based on 2025/26 qualifying income, and over GBP 20,000 from 6 April 2028 based on 2026/27 qualifying income. This is about record keeping and reporting, not a new tax rate, but it can change how you keep books and submit updates.

Self-employed tax FAQs

Do I pay tax on turnover?

Normally no. Sole traders pay Income Tax and Class 4 National Insurance on taxable profit, not total turnover. Turnover still matters for VAT, MTD and record keeping.

Do self-employed people still pay Class 2 National Insurance?

Most people no longer pay compulsory Class 2 in the old way. If profits are above the Small Profits Threshold, Class 2 is usually treated as paid. If profits are below it, voluntary Class 2 may be useful for NI record protection.

Can I use this if I also have a job?

Yes. Open Other tax details and enter your gross employment income and PAYE tax already deducted. The calculator includes the income in the tax calculation and deducts the PAYE credit from the estimated balance. It does not calculate employee National Insurance.

Does it include Gift Aid and pension tax relief?

Yes, for qualifying Gift Aid and relief-at-source pension payments. Enter the net amount you actually paid in the advanced section. Do not enter workplace net-pay or salary-sacrifice pension contributions in that field.

What if I made a loss?

The calculator shows a loss warning, but it does not model loss relief claims. Losses can sometimes be carried forward or relieved in other ways, depending on the facts.

When do I need to register for Self Assessment?

GOV.UK says you must usually tell HMRC by 5 October after the end of the tax year if you need to complete a return and have not already registered for that year.

Official sources

Last verified: July 26 2026. Calculations are estimates based on the published rules and assumptions shown on this page.

GOV.UK Income Tax rates and Personal Allowance - Personal Allowance, taper over GBP 100,000, and UK Income Tax bands
GOV.UK National Insurance rates and allowances - Class 2 Small Profits Threshold and Class 4 National Insurance rates
GOV.UK trading allowance - GBP 1,000 trading allowance and when it can replace actual expenses
GOV.UK payments on account - Self Assessment advance payment rules, GBP 1,000 and more-than-80% exceptions
HMRC payments-on-account legal framework - relevant amount after tax deducted at source and the 50% instalment calculation
HMRC Self Assessment overpayments guidance - overpayments kept on the Self Assessment record are allocated against future liabilities unless repaid
GOV.UK self-employed expenses - official guidance on allowable business expenses
Scottish Government Income Tax rates and bands - Scottish starter, basic, intermediate, higher, advanced and top rates for both supported years
GOV.UK adjusted net income - grossing up qualifying Gift Aid and relief-at-source pension payments
GOV.UK private pension tax relief - relief at source and additional relief above the 20% rate
HMRC HS342 Charitable giving (2026) - Gift Aid gross-up and higher or additional-rate relief
HMRC HS227 Losses (2026) - current-year, earlier-year and carried-forward trading-loss relief options
GOV.UK Making Tax Digital for Income Tax - MTD qualifying income thresholds from 2026, 2027 and 2028
GOV.UK Self Assessment deadlines - 5 October registration, 31 October paper return and 31 January online return/payment deadlines

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