Self-Employed Tax Calculator (Sole Traders)
Work out Income Tax and Class 2/4 National Insurance owed on your self-employed profits as a sole trader.
2026/27 rates · last verified 15 August 2026
Estimates only, not financial advice. Verify with HMRC or a qualified accountant before making decisions. See our full disclaimer.
Your profit is above the Small Profits Threshold, so you get a qualifying year for the State Pension automatically. No Class 2 payment is due.
Income Tax breakdown
| Band | Taxed at | Amount in band | Tax |
|---|---|---|---|
| Basic rate | 20% | £22,430.00 | £4,486.00 |
Class 4 National Insurance breakdown
| Band | Taxed at | Amount in band | Tax |
|---|---|---|---|
| Main rate | 6% | £22,430.00 | £1,345.80 |
How this is calculated
As a sole trader you pay Income Tax and Class 4 (and where applicable Class 2) National Insurance on your profits. This calculator combines both to show your total tax bill.
Class 4 National Insurance is charged at 6% on profits between £12,570 and £50,270, then 2% above that, on top of Income Tax on the same profit figure. Class 2 National Insurance, which used to be a flat weekly charge for most sole traders, was abolished as a compulsory contribution from April 2024: if your profits are £7,105 or more, HMRC treats your Class 2 contributions as having been paid, so you get a qualifying year towards your State Pension automatically, with nothing to pay.
If your profits are below £7,105, you won't get a qualifying year automatically, but you can choose to pay Class 2 voluntarily (currently £3.65 a week) to protect your State Pension record. This calculator lets you toggle that on to see the cost. If you have income and expenses that fall under Making Tax Digital for Income Tax (mandatory from April 2026 for sole traders and landlords with qualifying income over £50,000), you'll also need compatible digital record-keeping software alongside this figure.
Read more: Self-employed tax explained: Income Tax and National Insurance for sole traders
Frequently asked questions
What counts as profit for self-employed tax?
Profit is your total business income minus allowable business expenses. It's this figure, not your turnover, that's taxed.
When is self-employed tax due?
Self Assessment tax is typically due by 31 January following the end of the tax year, with a possible payment on account due the following 31 July too.
Do I need to pay Class 2 National Insurance?
Only if you want to. Once your profits reach £7,105, HMRC treats your Class 2 contributions as having been paid, so you get a qualifying year for the State Pension without an actual bill. Below that threshold, you can choose to pay Class 2 voluntarily instead.
Is there a tax-free allowance for small side-income?
Yes, the £1,000 trading allowance lets you earn up to £1,000 a year from self-employment or casual income tax-free. In most cases there's nothing to report to HMRC if that's all you earn, though there are exceptions, so check HMRC's guidance if you're unsure. It's applied before expenses, so you can't also deduct expenses on top of it.
What are payments on account?
If your Self Assessment bill is £1,000 or more, and less than 80% of the tax you owed was collected another way (for example through PAYE on other income), HMRC asks you to pay half of next year's estimated bill in advance: one instalment on 31 January alongside that year's balancing payment, and the other on 31 July.
Do I need to use Making Tax Digital for Income Tax?
If you're a sole trader or landlord with qualifying income over £50,000 (based on your 2024/25 figures), it's been mandatory since 6 April 2026: you need compatible software, digital records, and quarterly updates to HMRC, on top of your annual Self Assessment return. The threshold drops to £30,000 from April 2027 and £20,000 from April 2028.
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