SoleTraderTaxCalculator
Updated for 2026/27

Sole Trader Tax Calculator UK 2026/27

Estimate your self-employed Income Tax, Class 4 National Insurance, take-home profit and monthly tax set-aside. Enter taxable profit — not turnover — to plan for 2026/27.

Updated for 2026/27. Uses UK tax bands and HMRC/GOV.UK guidance. Estimates only — not tax advice.

Calculate sole trader tax Read the guides
Self Assessment estimateMonthly tax reserveStudent loan optionalPension optional
2026/27 tax year England, Scotland, Wales & NI Student loan support Practical reserve figure

Sole trader tax calculator

Self-employed tax estimate

Adjust inputs below — results update instantly.

Tax year 2026/27
How do you earn?

Enter profit after allowable business expenses — not total turnover.

The annual profit used in calculations will be monthly profit × 12.

£
£
Expenses exceed estimated turnover — check your inputs.
£
£
Expenses exceed estimated turnover — check your inputs.
£
£
£21,768take-home / year£1,814/mo
Monthly net
£1,814
Tax set-aside
£269
Quarterly reserve
£808
Take-home£21,768
Income Tax£2,486
National Insurance£746
Student loan£0
Pension£0
Show detailed breakdown ▼
Income tax£2,486.00
Class 4 National Insurance£745.80
Student loan£0.00
Pension contribution£0.00
Take-home after tax£21,768.20
Monthly tax set-aside£269.32
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HMRC 2026/27 · Methodology
2026/27 edition
Sole Trader Tax Survival Pack

Self Assessment checklist, expense tracker, payments on account calendar and more — all in one practical PDF. Updated for 2026/27.

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About this tool

HMRC-based sole trader tax estimate for quick planning

Estimates sole trader income tax and Class 4 National Insurance on taxable profit for 2026/27. Enter profit after allowable business expenses — not turnover. Results are for planning only. See the methodology for full assumptions.

Last updated May 2026. Written by the editorial team and reviewed against current GOV.UK and HMRC guidance. Results are estimates for planning only and are not tax, accounting or financial advice.

Updated for 2026/27 HMRC / GOV.UK rates Estimate only — not advice See methodology
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Self-Employed Tax Calculator UK
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Sole Trader Tax Calculator
Estimate sole trader income tax, Class 4 National Insurance and take-home profit for 2026/27.
Self Assessment Calculator UK
Estimate your Self Assessment tax bill from sole trader profit and plan for January and July payment deadlines.
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Calculate how much to set aside each month from sole trader profit to cover income tax and National Insurance for 2026/27.
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Estimate how much of your sole trader profit remains after income tax, NI and optional deductions for 2026/27.
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Estimate Class 4 National Insurance contributions from annual self-employed profit for 2026/27.
Sole Trader Student Loan Calculator
Estimate how student loan repayments reduce sole trader take-home income across Plans 1, 2, 4, 5 and Postgraduate for 2026/27.
Quarterly Tax Calculator for Sole Traders
Convert an annual sole trader tax estimate into a quarterly reserve figure for practical cash management.
Practical guides

Sole trader guides

Sole trader expenses: a practical guide
How allowable business expenses reduce taxable profit, what counts, what does not, and why using the right profit figure matters for every tax estimate.
Making Tax Digital for sole traders
What Making Tax Digital for Income Tax means in practice, who it affects, income thresholds, digital record requirements and how to prepare.
Payments on account: what sole traders need to know
How payments on account work, when they apply, why they catch people out and how to plan your monthly set-aside to cover them.
Self Assessment deadlines for sole traders
The key filing and payment deadlines sole traders must know, what late filing costs, and how to use your tax estimate to prepare in advance.
Bookkeeping for sole traders: practical basics
What records sole traders must keep, how to build a monthly bookkeeping habit and why clean records improve pricing and tax estimates.
Tax on side hustle income: a practical guide
How self-employed side income is taxed, the trading allowance, when to register, how employment income affects the calculation, and what to set aside.
About sole trader tax

UK sole trader tax explained

Income tax and Personal Allowance
Sole traders pay income tax on taxable profit above the Personal Allowance (£12,570 for 2026/27). The basic rate (20%) applies up to £50,270, the higher rate (40%) up to £125,140, and the additional rate (45%) above that. Scottish taxpayers have different band thresholds.
National Insurance for sole traders
Self-employed people pay Class 4 National Insurance contributions: 6% on profits between £12,570 and £50,270, and 2% above £50,270. Class 2 NI was abolished from 6 April 2024. Class 4 NI is paid via Self Assessment alongside income tax.
Profit, turnover and allowable expenses
Turnover is your total business income before expenses. Taxable profit is what remains after deducting allowable business expenses such as software, equipment, travel for business, professional fees and a reasonable use-of-home proportion. Tax is calculated on profit, not turnover.
Self Assessment and payments on account
Sole traders file a Self Assessment return each year and pay any tax due by 31 January. If your bill exceeds £1,000, you may also need to make two payments on account (each 50% of the previous year's bill) in January and July. The monthly set-aside figure helps you plan for this.
Making Tax Digital for sole traders
Making Tax Digital for Income Tax (MTD for ITSA) requires digital record-keeping and quarterly updates to HMRC. It applies to sole traders with qualifying income above the threshold. Check GOV.UK for current implementation dates and requirements.
Sole trader vs limited company
A sole trader structure is simpler to run but offers fewer extraction options than a limited company. At higher profit levels, incorporating may reduce the overall tax burden, but brings additional admin, payroll and filing obligations. Use LimitedCompanyTaxCalculator.co.uk to compare both structures.
Quick reference

UK sole trader tax 2026/27 — common profit levels

Taxable profitEst. income taxEst. Class 4 NIEst. take-homeMonthly set-aside
£20,000£1,486£446£18,068£161
£30,000£3,486£1,046£25,468£378
£40,000£5,486£1,646£32,868£594
£50,000£7,486£2,246£40,268£811
£60,000£11,432£2,457£46,111£1,157
£75,000£17,432£2,757£54,811£1,682
£100,000£27,432£3,257£69,311£2,557

2026/27 estimates. England/Wales/NI tax rates. No student loan, no pension, no other income. Approximate figures only.

FAQ

Sole trader tax — common questions

How much tax does a sole trader pay?
A sole trader pays income tax on taxable profit above the Personal Allowance (£12,570 for 2026/27) at 20%, 40% or 45%, plus Class 4 National Insurance at 6% on profits between £12,570–£50,270 and 2% above £50,270. The exact bill depends on profit level, region, student loan plan and pension contributions.
Is sole trader tax based on turnover or profit?
Tax is calculated on taxable profit after allowable business expenses — not on total turnover. Enter your net profit into this calculator, not gross revenue. If you are not sure of your profit, subtract realistic business expenses from your expected turnover first.
Does this calculator include National Insurance?
Yes. The estimate includes Class 4 National Insurance contributions for 2026/27. Class 2 NI was abolished from 6 April 2024. The breakdown shows NI separately so you can see the full tax-plus-NI picture.
How much should I set aside for tax?
A common guide is 20–30% of profit, but the exact figure depends on your income level and deductions. This calculator gives a specific monthly set-aside amount based on your estimated income tax and NI combined. Keeping this in a separate bank account avoids cashflow surprises at Self Assessment time.
Does this include payments on account?
The calculator provides a monthly set-aside and a quarterly reserve figure to support planning. Payments on account (due in January and July, each at 50% of your prior year's bill) are not automatically built into these totals — they are shown separately as a reference. Always check current GOV.UK guidance for filing obligations. The Sole Trader Tax Survival Pack includes a payments on account calendar to plan both January and July deadlines.
Do sole traders need Making Tax Digital?
Making Tax Digital for Income Tax (MTD for ITSA) will apply to self-employed people and landlords above qualifying income thresholds. Check GOV.UK for current rollout dates and thresholds.
Should I stay sole trader or go limited?
The decision depends on profit level, how much you want to extract, admin tolerance, pension strategy and long-term plans. At lower profit levels, the simplicity of sole trader often outweighs any tax saving from incorporating. Use LimitedCompanyTaxCalculator.co.uk to model both structures with the same profit figure.
Is this tax advice?
No. All results are estimates for planning and comparison purposes only. They are based on published 2026/27 HMRC rates and a simplified model. For Self Assessment filing, tax planning advice or compliance decisions, consult a qualified accountant or HMRC directly.
Calculator suite

Independent UK finance calculator network

SoleTraderTaxCalculator.co.uk is part of an independent UK finance calculator network covering salary, employer costs, benefits, home buying and business tax.

AfterTaxSalary.co.uk
Use the PAYE salary tool if you want an employed take-home comparison beside your self-employed result.
EmployerCalculator.co.uk
Useful when a sole trader contract is being weighed against hiring someone through payroll.
UKBenefitsCalculator.co.uk
Use this where self-employed income affects benefits planning or household budgeting.
HomeBuyingCosts.co.uk
Useful once you want to turn stable post-tax profit into a realistic home-buying budget.
LimitedCompanyTaxCalculator.co.uk
Compare salary, dividends, corporation tax and retained profit if you are considering moving from sole trader to limited company.
How it works

Three steps to a sole trader tax estimate

01
Enter your profit
Use annual, monthly, day rate or hourly mode. Always enter taxable profit after allowable business expenses — not turnover.
02
Review deductions
The estimate breaks out income tax, Class 4 NI and optional deductions including student loan and pension contributions.
03
Use the set-aside figure
The monthly set-aside and quarterly reserve help you build cash for Self Assessment throughout the year.
Methodology
The full set of HMRC rates, assumptions and formula notes used in this calculator.
Guides
Expenses, payments on account, Making Tax Digital and the sole trader vs limited company comparison.
Planning estimates only
Not tax advice, not a filing tool. For formal advice or filing, use a qualified accountant or HMRC directly.
Sources and methodology

HMRC and GOV.UK sources

Income tax rates and Personal Allowance — GOV.UK
Self-employed National Insurance rates — GOV.UK
Self Assessment tax returns — GOV.UK
Making Tax Digital for Income Tax — GOV.UK
Scottish income tax rates — GOV.UK
Student loan repayment thresholds — GOV.UK

All tax figures are estimates based on published HMRC rates for 2026/27. Results are for planning purposes only and should not be used as the basis for filing or formal tax advice.

Making Tax Digital

MTD for Income Tax

From 6 April 2026, Making Tax Digital for Income Tax is mandatory for sole traders and landlords with qualifying income over £50,000. That means keeping digital records and sending HMRC a short update every quarter through recognised software, instead of one Self Assessment at year end. The threshold drops to £30,000 in April 2027 and £20,000 in April 2028, and HMRC reckons around 860,000 people are in the first wave.

HMRC-recognised software includes FreeAgent, Xero, QuickBooks, Sage and Zoho Books. FreeAgent is free for Mettle and NatWest business banking customers. There are no penalties for late quarterly updates during 2026/27.

Getting set up

Business bank accounts

Keeping a separate account for business income and expenses makes Self Assessment and record-keeping considerably easier.

Starling Business
Permanently free, no monthly fee. A fully licensed UK bank - deposits up to £85,000 are FSCS protected. Accepts sole traders and limited companies. 0.7% on Post Office cash deposits.
Open an account →
Tide
Free to open. Built-in invoicing and expense tracking. 20p per outgoing transfer on the free tier. Accepts businesses with no trading history. Funds are safeguarded as e-money, not FSCS protected.
Open an account →
Mettle by NatWest
Free for sole traders and single-director limited companies. Includes FreeAgent bookkeeping at no extra cost - useful for MTD record-keeping. Funds safeguarded as e-money, not FSCS protected. No cash deposits.
Open an account →