Use our online calculator to estimate how much tax you will pay as a sole trader in the 2026/27 tax year.
If you’re self-employed, you must work out your taxable profits each year – your business turnover minus allowable expenses – and report them via the Self Assessment process.
Enter your turnover and allowable expenses below to estimate your tax liability and take-home profit.
Sole Trader Tax Calculator
Estimate your Income Tax, National Insurance and take-home profit as a UK sole trader.
Your total self-employed sales/income before expenses.
Business costs deductible when working out taxable profit.
£45,000
Additional options
£0
Per month
£0
£0
£0
0%
Your estimated tax calculation
£0
− £0
− £0
− £0
− £0
£0
How sole traders are taxed
When you work for yourself, you pay tax on your taxable business profit — broadly, your turnover less allowable business expenses.
Your profits may be subject to Income Tax and Class 4 National Insurance. Student loan repayments may also be due if your income is above the relevant threshold.
Income Tax rates in 2026/27
For taxpayers in England, Wales and Northern Ireland:
- Personal Allowance: £12,570 — no Income Tax is normally due up to this level.
- Basic rate: 20% on taxable income up to £37,700 above your Personal Allowance.
- Higher rate: 40% on income above the basic-rate band up to the additional-rate threshold.
- Additional rate: 45% on income above £125,140.
Your Personal Allowance is reduced by £1 for every £2 your adjusted net income exceeds £100,000. It is completely withdrawn once income reaches £125,140.
National Insurance rates in 2026/27
Class 2 National Insurance is no longer a compulsory charge for most self-employed people.
- If your profits are below the Small Profits Threshold of £7,105, you may choose to pay voluntary Class 2 contributions at £3.65 per week to help protect your National Insurance record.
- If your profits are at least £7,105, Class 2 contributions are normally treated as having been paid for National Insurance record purposes without an actual Class 2 payment being due.
Class 4 National Insurance is charged at:
- 6% on profits between £12,570 and £50,270.
- 2% on profits above £50,270.
Student loan repayments
The calculator can estimate repayments for Student Loan Plans 1, 2, 4 and 5, plus postgraduate loans.
It assumes your sole trader profit is your only income for student loan purposes. If you also have PAYE employment or other income, your actual repayment may be different.
If you live in Scotland
Scottish taxpayers pay Income Tax using different bands and rates from taxpayers in England, Wales and Northern Ireland. Select Scotland in the calculator to use the Scottish Income Tax bands.
Class 4 National Insurance rates are the same throughout the UK.
Worked examples
The examples below use the 2026/27 rates for England, Wales and Northern Ireland and assume there are no student loan repayments.
Example 1 – turnover £40,000, expenses £10,000
- Turnover: £40,000
- Allowable business expenses: £10,000
- Taxable profit: £30,000
- Personal Allowance: £12,570
- Taxable at 20%: £17,430 → £3,486 Income Tax
- Class 4 NI: 6% of £17,430 = £1,045.80
- Total Income Tax and Class 4 NI: £4,531.80
- Estimated take-home profit: £25,468.20
Example 2 – turnover £75,000, expenses £15,000
- Turnover: £75,000
- Allowable business expenses: £15,000
- Taxable profit: £60,000
- Personal Allowance: £12,570
- Taxable at 20%: £37,700 → £7,540 Income Tax
- Taxable at 40%: £9,730 → £3,892 Income Tax
- Total Income Tax: £11,432
- Class 4 NI: 6% of £37,700 = £2,262, plus 2% of £9,730 = £194.60
- Total Class 4 NI: £2,456.60
- Total Income Tax and Class 4 NI: £13,888.60
- Estimated take-home profit: £46,111.40
Payments on account
The calculator estimates your liability for the tax year. It does not add payments on account to the headline result.
If you owe enough tax through Self Assessment, HMRC may ask you to make two advance payments towards the following year’s bill. This can make the amount you physically pay in your first Self Assessment year significantly higher than the liability shown by the calculator.
A note on pension contributions
Your personal pension contributions are not allowable business expenses, so they do not reduce your sole trader business profit.
However, pension contributions can qualify for Income Tax relief and can also affect your adjusted net income and the tax bands that apply to you. The calculator does not currently include pension contributions or Gift Aid payments.
Find out more in our guide to sole trader pension contributions.