How much tax do I pay if I am self-employed in the UK?

You pay Income Tax on your profits at the same 20%, 40% and 45% bands as employees, plus Class 4 National Insurance at 6% on profits between £12,570 and £50,270 and 2% above. Your first £12,570 of profit is covered by the Personal Allowance.

How much should I set aside for tax as a sole trader?

A common guideline is to set aside 25 to 30 percent of your profits for Income Tax and National Insurance, rising higher once you cross into the higher-rate band. This calculator shows the exact figure for your profit level.

● Sole traders · 2026/27 · Class 4 NI

Self-Employed Tax Calculator

Q: What is Class 4 National Insurance for 2026/27?

Class 4 National Insurance for the self-employed is 6% on profits between £12,570 and £50,270, and 2% on profits above £50,270.

Enter your annual profit and see your Income Tax, Class 4 National Insurance, total tax bill and take-home for 2026/27 — plus a clear figure for how much to set aside before your Self Assessment deadline.

🧑‍💻 Sole trader & freelance 📇 Class 4 NI (6% / 2%) 💰 Set-aside amount

Calculate self-employed tax

Income Tax + Class 4 NI · 2026/27

Annual profit (turnover minus expenses)

Pension contribution optional, per year

How self-employed tax works in 2026/27

As a sole trader you pay tax on your profit — your turnover minus allowable business expenses — not on everything you invoice. Two charges apply: Income Tax at the usual bands, and Class 4 National Insurance. You declare it all through Self Assessment.

Profit band	Income Tax	Class 4 NI
Up to £12,570	0%	0%
£12,570 – £50,270	20%	6%
£50,270 – £125,140	40%	2%
Over £125,140	45%	2%

Note that Class 4 NI falls to 2% above £50,270, while Income Tax rises to 40% — so the combined marginal rate jumps at that threshold but not as steeply as you might expect.

How much to set aside

The biggest mistake new sole traders make is spending money that HMRC will later want. As a rough guide:

Up to ~£50,000 profit: set aside about 25–30%.
Higher-rate profits: set aside closer to 40%+ on the slice above £50,270.
Remember payments on account — HMRC asks for 50% of next year’s estimated bill twice a year, which can double your first January payment.

Cut your bill legally: claim every allowable expense, use the £1,000 trading allowance if your costs are tiny, and pay into a pension — contributions get tax relief and reduce your taxable profit.

Key Self Assessment dates

5 October: register for Self Assessment if it’s your first year.
31 January: file your online return and pay the tax due (plus any first payment on account).
31 July: second payment on account.

Self-employed tax FAQs

How much tax do I pay if I'm self-employed?

Income Tax at 20%, 40% and 45% on your profit (after the £12,570 allowance), plus Class 4 NI at 6% between £12,570 and £50,270 and 2% above. The calculator shows the exact figures for your profit.

What is Class 4 National Insurance for 2026/27?

6% on profits between £12,570 and £50,270, and 2% on profits above £50,270.

How much should I set aside for tax?

Around 25–30% of profits up to the higher-rate threshold, more above it. Don’t forget payments on account, which can make your first January bill larger than expected.

Do I still pay Class 2 NI?

Most self-employed people no longer have to pay Class 2 NI if their profits are above the small-profits threshold, but they still get State Pension qualifying years. Those with lower profits can pay voluntarily to protect their record.

Profit	£0
Income Tax	£0
Class 4 National Insurance	£0
Take-home	£0