Calculator
🇬🇧 UK onlySelf-Employed Tax Calculator (UK Sole Trader)
Enter your business income and expenses to see your taxable profit, Income Tax, Class 2 and Class 4 National Insurance, and your take-home profit after tax. Rates shown are for the 2026/27 tax year (6 April 2026 – 5 April 2027), England & Wales. For sole traders and partners. Limited companies pay Corporation Tax instead.
Your business
Total self-employed income for the tax year, before expenses.
Costs incurred wholly for the business: materials, travel, home & phone use, fees, insurance, equipment.
Self-employed student loan repayments are collected through Self Assessment.
Assumes self-employment is your only taxable income and uses England & Wales Income Tax bands for 2026/27. Scottish taxpayers have different Income Tax rates (NI is the same). This is guidance, not tax advice.
Tax breakdown
Self Assessment for 2026/27 is due by 31 January 2028; if your bill tops £1,000 you'll also make Payments on Account. This estimate is for guidance only, so confirm figures with your accountant or HMRC.
Based on GOV.UK Income Tax rates and self-employed National Insurance rates.
How self-employment tax works
As a sole trader you don't pay tax on everything you earn. You pay on your profit, which is your income minus your allowable business expenses. That profit is then subject to two things: Income Tax and National Insurance. Both are worked out and paid together once a year through Self Assessment.
For every rate and threshold in one table, including combined rates and tax at different profit levels, see sole trader tax rates and thresholds 2026/27.
Income Tax bands (England & Wales, 2026/27)
- Personal allowance (0%): the first £12,570 of profit is tax-free (it tapers away above £100,000 and disappears at £125,140).
- Basic rate (20%): on profit from £12,571 to £50,270.
- Higher rate (40%): on profit from £50,271 to £125,140.
- Additional rate (45%): on profit above £125,140.
National Insurance for the self-employed (2026/27)
- Class 4 (6%): on profit between £12,570 and £50,270, then 2% on profit above £50,270. The main rate was cut from 9% to 6% in April 2024.
- Class 2 (nil for most): if your profit is £7,105 or more (the Small Profits Threshold) you're treated as having paid Class 2 without actually paying anything, so you keep your State Pension entitlement for free. Below £7,105 you can pay it voluntarily at £3.65/week.
Worked example
Scenario: £50,000 profit (after expenses), no student loan, 2026/27.
Income Tax: 0% on the first £12,570 + 20% on the remaining £37,430 = £7,486
Class 4 NI: 6% on £37,430 (profit between £12,570 and £50,270) = £2,246
Class 2 NI: £0, as profit is above the £7,105 threshold
Total to pay: £7,486 + £2,246 = £9,732, an effective rate of 19.5%, leaving £40,268 take-home.
Payments on Account: the cash-flow trap
If your Self Assessment bill is more than £1,000, HMRC asks you to pay towards next year's bill in advance through Payments on Account. You pay two instalments, each 50% of this year's bill, on 31 January and 31 July. In your first profitable year this can mean paying roughly 150% of your bill in one January, so it's worth setting the money aside early.
Frequently asked questions
How much tax do I pay as self-employed in 2026/27?
You pay Income Tax and National Insurance on your profit (income minus allowable expenses). For 2026/27 in England and Wales you get a £12,570 personal allowance, then 20% Income Tax up to £50,270, 40% up to £125,140, and 45% above. On top of that, Class 4 NI is 6% on profit between £12,570 and £50,270 and 2% above £50,270. Class 2 NI is nil once profit passes £7,105.
What is Class 4 National Insurance?
Class 4 is the main NI charge for the self-employed, paid through Self Assessment alongside Income Tax. For 2026/27 it's 6% on profit between the Lower Profits Limit (£12,570) and the Upper Profits Limit (£50,270), and 2% on anything above £50,270.
Do I still pay Class 2 National Insurance?
For 2026/27, if your profit is at or above the Small Profits Threshold of £7,105 you're treated as having made Class 2 contributions without paying anything, so your State Pension and benefit entitlement is protected at no cost. If your profit is below £7,105 you can choose to pay Class 2 voluntarily (£3.65 per week) to keep that entitlement.
What expenses can I deduct as a sole trader?
Allowable expenses are costs incurred wholly and exclusively for the business: stock and materials, business travel, a proportion of home and phone costs, accountancy fees, insurance, marketing, and tools or equipment. If your income is under £1,000 you can use the £1,000 trading allowance instead of adding up costs. Money you draw for yourself is not an expense.
When do I pay my Self Assessment tax bill?
The balancing payment for a tax year is due by 31 January after it ends, so 2026/27 tax is due by 31 January 2028. If your bill is over £1,000 you also make Payments on Account: two advance instalments toward next year, each 50% of this year's bill, due 31 January and 31 July.
Is this different from a limited company?
Yes. A sole trader pays Income Tax and Class 2/4 NI on business profit through Self Assessment, which is what this calculator models. A limited company pays Corporation Tax on its profit, and the director then pays tax on salary and dividends separately.