Sole Trader Tax Calculator (UK)

Tax and National Insurance to pay: £5,831.80
Income tax: £4,486.00
Class 4 National Insurance: £1,345.80
Taxable profit: £35,000.00
You keep (profit after tax): £29,168.20
Set aside each month: £485.98
Share of profit going on tax: 16.66%

You keep £29,168.20 83%Income tax £4,486.00 13%National Insurance £1,345.80 4%

What it does

If you're a self-employed sole trader, you pay income tax and Class 4 National Insurance on your profit through Self Assessment. Enter your income and expenses to see what you'll owe for the tax year, what you keep, and how much to put aside each month so the bill isn't a shock.

How to use it

Business income (turnover): Everything your business earned in the tax year, before expenses. Leave out any VAT you charged if you're VAT registered.
Allowable expenses: Costs of running the business, such as stock, equipment, software, insurance, phone, travel and an accountant. Not personal spending.
Use £1,000 allowance?: The £1,000 trading allowance: you can take £1,000 off your income instead of claiming expenses. Only worth it if your real expenses are less than £1,000.
Tax year: The tax year the profits fall in.
Scottish taxpayer?: Choose Yes if you live in Scotland: it sets its own income tax bands. England, Wales and Northern Ireland share the same bands. National Insurance is the same everywhere.

Common uses

Saving enough each month for your Self Assessment bill.
Checking what you'll keep before taking on work.
Setting a freelance day rate. Try the Freelance Day Rate Calculator
Adding VAT to invoices. Try the VAT Calculator (UK)
Comparing with take-home pay as an employee. Try the Take-Home Pay Calculator (UK)

The formula

Profit = income − allowable expenses (or − £1,000 trading allowance)Income tax: 0% on the Personal Allowance (£12,570), then 20%, 40% and 45% (Scotland: 19% to 48%)Class 4 National Insurance: 6% on profit from £12,570 to £50,270, then 2%

Where:

Personal Allowance: falls by £1 for every £2 of income over £100,000
Class 2 National Insurance: no longer compulsory since April 2024; you can pay it voluntarily to protect your State Pension if profits are low

Assumes this business is your only income. If you also have a job, your Personal Allowance and lower bands are used up first by your salary, so more of your profit is taxed at higher rates. Rates checked against GOV.UK and gov.scot on 26 October 2026.

Worked example

Income of £40,000 less £5,000 of expenses in 2026/27:

Profit: £35,000.00
Income tax: 20% on £22,430.00 above the £12,570.00 allowance = £4,486.00
Class 4 National Insurance: 6% on profit above £12,570 = £1,345.80
Total to pay: £5,831.80, or about £485.98 a month to put aside

Questions people ask

When do I pay my tax as a sole trader?

Through Self Assessment, by 31 January after the end of the tax year. If your bill is over £1,000 you'll usually also make two 'payments on account' towards the next year, on 31 January and 31 July, each half of the previous year's bill. That's why the first year can feel expensive.

How much should I put aside for tax?

Use the 'set aside each month' figure. A common rule of thumb is 25 to 30% of profit, but for many sole traders on modest profits it's less, as this calculator shows.

What expenses can I claim?

Costs that are wholly for the business: stock, materials, tools, software, insurance, business travel, phone and internet for work, professional fees and so on. You can't claim personal spending, and some items, such as a car or working from home, are only partly allowable.

Last checked 26 October 2026