Use our Excel calculator to work out how much tax you will have to pay as a sole trader.
If you’re self-employed, you need to work out your taxable profits (turnover minus expenses) each year, via the Self Assessment process.
You are liable to pay income tax, Class 2 and 4 National Insurance Contributions on any profits you make (scroll down for more details).
Simply enter your turnover and expenses into the input fields below to calculate your liability.
2022/23 Sole Trader Tax Calculator
How are sole traders taxed?
If you are self-employed, your profits are subject to income tax and National Insurance Contributions.
Income Tax in 2022/3
You will pay income tax on any profits in excess of your personal allowance (£12,570 for most people in 2022/3).
The 20% basic rate applies to income between £12,570 and £50,270.
The 40% higher rate applies to income between £50,270 and £150,000.
The 45% additional rate applies to income over £150,000.
National Insurance in 2022/3
Class 2 NICs are £3.15 per week (if your business profits are above £6,725).
Class 4 NICs are applied at 10.5% on profits between £9,881 – £50,270, and 3.25% on profits above this threshold.
Confusingly, the Class 4 threshold changes from £9,880 to £12,570 from July 6th, 2022. This means that, on an annualised basis, you pay Class 4 NICs on profits above £11,908 during the 2022/23 tax year.
Further Information
Read our concise guide to sole trader tax for full details.
A note on pension contributions. Aside from any contributions made to your employees, your own personal pension contributions aren’t an allowable business expense. However, they are tax deductible, and this process takes place via self-assessment. Tax relief is available according to the tax band your income falls into. We’ve included the pension contribution row for illustrative purposes only.
Try our limited company tax calculator to find out your tax liability if you work via your own company.
Read more about Self Employed National Insurance on the GOV.UK site.
