Self-Employed Tax Calculator 2026

As a self-employed person you pay the same income tax rates as employees (20%, 40%, 45%), but instead of National Insurance Class 1 (employee NI), you pay Class 4 NI on your profits: 6% on profits between £12,570 and £50,270, and 2% above. You also no longer pay Class 2 NI from April 2024, though it is treated as paid for state pension purposes.

Your taxable profit is your total income from self-employment minus allowable business expenses. Allowable expenses include business travel, equipment, software, office costs, professional fees and marketing — but not personal expenses or capital purchases (these have their own rules).

If your annual tax bill exceeds £1,000, HMRC requires you to make advance payments toward next year's bill — called Payments on Account. You pay 50% in January and 50% in July, on top of settling the previous year's bill. This can create a large payment in your first year as a self-employed person.

The online Self Assessment deadline is 31 January following the end of the tax year. For 2025/26, the deadline is 31 January 2027. The paper return deadline is 31 October. Any tax owed must also be paid by 31 January to avoid interest and penalties.

A common rule of thumb is to set aside 25–30% of your profit for tax and National Insurance, though higher earners should set aside more. Because Payments on Account can require paying 150% of your bill in your first year, it's wise to save more than you think you need initially. Use the calculator to see your precise liability.

If your Self Assessment tax bill exceeds £1,000, HMRC requires advance payments toward the following year's bill, called Payments on Account. You pay 50% by 31 January and 50% by 31 July. In your first year this can mean paying your full bill plus an extra 50% on account, all in January — a common cash flow shock for new sole traders.

Allowable business expenses reduce your taxable profit. Common ones include office costs and software, business travel and mileage, a proportion of home running costs if you work from home, professional fees and insurance, equipment, and marketing or website costs. Keep records and receipts, as HMRC can request evidence.

Class 2 NI was effectively abolished as a separate charge from April 2024. Sole traders with profits above the small profits threshold are still treated as having paid it — protecting State Pension entitlement — but it no longer adds to your bill. You still pay Class 4 NI on profits above £12,570.