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Sole trader tax calculator

Income tax, Class 4 NIC and take-home on your self-employed profit. Free, instant, and no sign-up needed.

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  • 2026/27 rates
  • Free and instant
  • No sign-up
£

2026/27 rates for England, Wales and Northern Ireland. Scottish income tax bands differ.

  • Personal allowance£12,570
  • Income tax£6,486.00
  • Class 4 National Insurance£1,945.80
  • Total tax and NIC£8,431.80
  • Effective rate18.7%

Take-home after tax

£36,568

Want this result by email?

We will send your figures and a short note on what to check. An accountant may follow up if you ask a question.

How does the sole trader tax calculator work?

A sole trader pays income tax on profit above the £12,570 personal allowance, at 20% up to £50,270, 40% to £125,140 and 45% above, plus Class 4 National Insurance at 6% between £12,570 and £50,270 and 2% above. On £50,000 profit that is £7,486 income tax and £2,245.80 Class 4 NIC, leaving £40,268.20.

How it works.

  1. 1

    Profit, not turnover

    Tax is charged on profit: your income minus allowable business expenses. Accurate bookkeeping is what tells you the right profit figure, which is why most self-employed people who track expenses monthly pay less than those who guess at year-end.

  2. 2

    Income tax bands

    After the personal allowance, the first £37,700 of taxable profit is taxed at 20%, the next slice up to £125,140 at 40%, and anything above at 45%. The personal allowance reduces by £1 for every £2 of income over £100,000 and is gone at £125,140.

  3. 3

    Class 4 National Insurance

    Class 4 NIC is 6% on profits between £12,570 and £50,270 and 2% above that. Class 2 is no longer compulsory, although you can pay it voluntarily to protect your State Pension record.

Rates used, 2026/27.

Last checked November 2026 against GOV.UK: Income Tax rates and Personal Allowances. General information, not advice.

Rate

£12,570

Personal allowance

Rate

20% up to £50,270

Basic rate

Rate

40% to £125,140

Higher rate

Rate

45% above £125,140

Additional rate

Rate

6% then 2%

Class 4 NIC

A worked example.

A freelance designer with £35,000 profit pays £4,486 income tax and £1,345.80 Class 4 NIC, taking home £29,168.20, an effective rate of about 16.7%.

Using the result well.

What the number means, what it leaves out and what to do next.

01

Reading your result

The calculator puts the same profit through two structures: a sole trader paying income tax and Class 4 National Insurance, and a one-director company paying employer National Insurance, Corporation Tax, a salary and dividend tax. It shows what you keep in each case, so the difference is clear in pounds, not percentages.

At lower profits the two are close, and at some levels the sole trader keeps more. A company starts to pull ahead mainly when you leave part of the profit in it or use employer pension contributions.

  • Same profit, two structures
  • All taxes shown separately
  • Difference in pounds a year
02

What it does not capture

The comparison assumes you take all the profit out of the company and have no other income. It does not include the extra accountancy cost of a company, the value of limited liability, client requirements, IR35 or the cost of changing structure.

Those factors often matter more than a few hundred pounds of tax, so treat the number as one input to the decision.

  • Extra company running costs
  • Liability and client expectations
  • Cost and timing of switching
03

Making the decision

Run the calculator for a low, expected and high profit year, and look at how the gap moves. If the saving is small, simplicity may win. If it is large, or you want to retain profit for growth, a company is worth a closer look.

Then ask us to model your real figures, including any other income, so the decision rests on your numbers.

  • Test three profit levels
  • Add your other income
  • Plan the move at a tax-year start

Quick tips.

Tip

Use realistic profit

Estimate profit after all costs, including accountancy.

Tip

Think about retention

Leaving profit in the company changes the comparison.

Tip

Plan the switch

Moving a trade into a company has VAT and capital allowance effects.

Services that help.

Service

Tax planning for directors

Salary, dividends, pensions and timing planned to legally keep more.

Service

Year-end accounts

Statutory accounts and CT600, filed on time for a fixed price.

Service

Bookkeeping

Monthly books in Xero, QuickBooks or FreeAgent, ready for VAT and year end.

Questions about this calculator.

Does this include Scottish income tax?

No. It uses the rates for England, Wales and Northern Ireland. Scottish taxpayers pay income tax at different rates and bands set by the Scottish Parliament.

When is sole trader tax due?

Self Assessment returns and the balance of tax are normally due by 31 January after the tax year ends on 5 April, with payments on account due on 31 January and 31 July if your bill is over £1,000.

What if my income is over £50,000?

From April 2026 you must keep digital records and send quarterly updates under Making Tax Digital for Income Tax. See our MTD checker.

Want an accountant to run your real numbers?

Tell us about your company and we will confirm the best way to pay yourself, and a fixed fee.

Get a quote WhatsApp us0203 4411 258