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 2025/26 tax year (6 April 2025 – 5 April 2026), 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 2025/26. Scottish taxpayers have different Income Tax rates (NI is the same). This is guidance, not tax advice.
Tax breakdown
Self Assessment for 2025/26 is due by 31 January 2027; if your bill tops £1,000 you'll also make Payments on Account. This estimate is for guidance only — confirm figures with your accountant or HMRC.
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.
Income Tax bands (England & Wales, 2025/26)
- 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 (2025/26)
- 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 £6,725 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 £6,725 you can pay it voluntarily at £3.50/week.
Worked example
Scenario: £50,000 profit (after expenses), no student loan, 2025/26.
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 — profit is above the £6,725 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 2025/26?
You pay Income Tax and National Insurance on your profit (income minus allowable expenses). For 2025/26 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 £6,725.
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 2025/26 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 2025/26, if your profit is at or above the Small Profits Threshold of £6,725 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 £6,725 you can choose to pay Class 2 voluntarily (£3.50 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 2025/26 tax is due by 31 January 2027. 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 — what this calculator models. A limited company pays Corporation Tax on its profit, and the director then pays tax on salary and dividends separately.