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 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.
2023/24 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 2023/4
You pay income tax on any profits over your personal allowance (£12,570 for most people in 2023/4).
The 20% basic rate applies to income between £12,570 and £50,270.
The 40% higher rate applies to income between £50,270 and £125,140.
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The 45% additional rate applies to income over £125,140
National Insurance in 2023/4
Class 2 NICs are £3.45 per week (if your business profits are above £12,570). The calculator above assumes you earn above this threshold. If you don’t, please ignore the £179.40 entry.
Class 2 NICs will be abolished from 6th April 2024 onwards.
Class 4 NICs are 9% of profits between £12,570 – £50,270, and 2% of profits above this threshold.
Further Information
Read our concise guide to sole trader tax for full details.
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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.
A note on pension contributions
Aside from any contributions made to your employees, your own 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.