Self-Employed Tax Calculator

Self-employment tax in the UK consists of Income Tax and Class 4 National Insurance. Your taxable profit (income minus allowable expenses) is added to any other income, then taxed according to HMRC bands. Class 4 NI is charged at 9% on profits between £12,571 and £50,270, and 2% on profits over £50,270. Class 2 NI was abolished from April 2024.

Self-employment income includes all money you earn from your business activities, including sales, services, commissions, and any fees. This is your gross turnover before deducting any expenses. If you're a sole trader, freelancer, contractor, or running a partnership, your business income counts as self-employment income for tax purposes.

Allowable expenses include:

• Office costs (stationery, supplies)
• Travel expenses (business travel, not commuting)
• Equipment and tools
• Professional services (accountancy fees)
• Marketing and advertising
• Training courses related to your business
• Home office expenses (proportion of utilities, rent, mortgage interest)
• Equipment hire and leasing costs

If you're both employed and self-employed, your salary income is taxed through PAYE while your self-employment income is taxed through Self Assessment. Both are combined to determine your total tax band. Using a limited company structure allows you to pay yourself a small salary (potentially at National Insurance thresholds) and take remaining profits as dividends, which can be more tax-efficient.

Yes. The first £500 of dividend income is tax-free (dividend allowance). After that, dividends falling within the basic rate band are taxed at 5%, higher rate at 32.5%, and additional rate at 38.1%. Dividends use "notional" rates because they are paid from post-tax profits. Our calculator accounts for this automatically.

Class 4 National Insurance is payable if your self-employment profits are £12,570 or more per year. It's calculated on your annual profit and included in your Self Assessment tax return. Unlike Class 1 (employed) NI, there's no weekly contribution required—just the annual calculation added to your income tax.

If your tax bill exceeds £1,000, HMRC requires you to make "payments on account"—advance payments towards next year's tax. These are typically split into two instalments: 50% due 31 January and 50% due 31 July. Our calculator helps you understand your total annual liability so you can plan for these payments.

This calculator uses the official HMRC rates for 2026/27 and provides a good estimate of your tax liability. However, it cannot account for all individual circumstances such as Marriage Allowance, complex dividend scenarios, trading losses, capital gains, or Scottish/Welsh tax bands. For precise calculations, we recommend consulting a qualified accountant.