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Self-Employed Tax Calculator 2026/27

Estimate your income tax, National Insurance, and payments on account as a sole trader or freelancer.

Updated for the 2026/27 tax year · Last reviewed April 2026

How Self-Employed Tax Works in 2026/27

As a self-employed person, you pay income tax on your taxable profits (revenue minus allowable expenses). You also pay National Insurance: Class 2 NI (a flat weekly amount) and Class 4 NI (a percentage of your profits above the lower profits limit).

Unlike PAYE employees who have tax deducted throughout the year, self-employed people pay their tax bill in arrears via Self Assessment. This typically means two large payments on account in January and July, plus a balancing payment when you file your return.

If you are thinking about incorporating (moving from sole trader to a limited company taking salary and dividends), you should also factor in your company's corporation tax liability before comparing the two structures.

2026/27 Self-Employed Tax Rates

Tax / NIRate / AmountOn profits above
Income Tax (Basic Rate)20%£12,570
Income Tax (Higher Rate)40%£50,270
Class 2 NI£3.5/week£12,570
Class 4 NI (Main)6%£12,570
Class 4 NI (Upper)2%£50,270

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Frequently Asked Questions

What National Insurance do self-employed people pay?
Self-employed people pay two types of NI. Class 2 NI is £3.5/week (£182.00/year) if your profits are above £12,570. Class 4 NI is 6% on profits between £12,570 and £50,270, and 2% above that.
What are payments on account?
Payments on account are advance payments towards your next year's tax bill. HMRC requires you to make two payments on account each year (on 31 January and 31 July), each equal to 50% of your previous year's tax bill. Any remaining balance (the 'balancing payment') is due on 31 January the following year.
What is the trading allowance?
The trading allowance is £1,000 per year. If your self-employed income is £1,000 or less, you don't need to pay tax on it or even submit a tax return. If your income is above £1,000, you can choose to deduct the £1,000 trading allowance instead of your actual expenses, which is useful if your expenses are very low.
What expenses can I deduct?
You can deduct allowable business expenses from your income to reduce your taxable profit. These include office costs, travel expenses (but not commuting), clothing (uniforms only), staff costs, marketing, and professional fees. You can't deduct personal expenses or capital expenditure (though you may claim capital allowances on business assets).
When do I need to submit a Self Assessment tax return?
You need to submit a Self Assessment tax return if you're self-employed with income over £1,000, have income over £150,000, or have untaxed income above £2,500. The online filing deadline is 31 January each year for the previous tax year. The paper filing deadline is 31 October.