SoleTraderTaxCalculator
Updated for 2026/27

Sole trader tax calculator

Enter your estimated taxable profit to get a clean breakdown of income tax, National Insurance, take-home and monthly set-aside. Based on HMRC 2026/27 rates.

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
Income taxClass 4 NITake-homeMonthly reserve
2026/27 tax year England, Scotland, Wales & NI Student loan support Practical reserve figure

Sole trader tax calculator

Income tax and Class 4 NI from profit — 2026/27

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.
£
£
£54,811take-home / year£4,568/mo
Monthly net
£4,568
Tax set-aside
£1,682
Quarterly reserve
£5,047
Take-home£54,811
Income Tax£17,432
National Insurance£2,757
Student loan£0
Pension£0
Show detailed breakdown ▼
Income tax£17,432.00
Class 4 National Insurance£2,756.60
Student loan£0.00
Pension contribution£0.00
Take-home after tax£54,811.40
Monthly tax set-aside£1,682.38
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HMRC 2026/27 · Methodology
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Payments on account

Your Self Assessment payment timeline

Based on your estimated bill of £0 for 2026/27, here is when HMRC expects payment — and why your first January bill can feel much bigger than the tax itself. Estimate only — your exact HMRC figures may differ.

31 January
£0
Balancing payment £0 + first payment on account £0
31 July
£0
Second payment on account
Following 31 January
£0
Next balancing payment + first payment on account for the following year
Tax year
ends 5 Apr 31 Jan 31 Jul Next
31 Jan
Set aside each month (ongoing)
£0
Set aside in your first payment-on-account year
£0
Why your first Self Assessment payment can feel higher
The first time you owe £1,000 or more, your 31 January bill includes two things: the full tax bill for the year just finished (the "balancing payment"), plus your first payment on account towards the next year — normally half of this year's income tax and Class 4 NI. That combination is why the first January can feel like roughly 150% of the tax itself.
What payments on account are
Payments on account are advance payments towards your next Self Assessment bill. There are usually two — one due 31 January and one due 31 July — and each is normally half of your previous year's income tax and Class 4 National Insurance. (Class 2 NI, student loan repayments and Capital Gains Tax are not included in payments on account; they are paid in the balancing payment.)
When you might not need to make them
You normally do not make payments on account if your last Self Assessment bill (income tax and Class 4 NI) was under £1,000, or if more than 80% of the tax you owe was already collected at source (for example through PAYE). You may also be able to ask HMRC to reduce your payments on account if you expect your next bill to be lower — but reducing them too far can lead to interest, so check your figures carefully.
Why your exact HMRC bill may differ
This is an estimate based on the figures you entered. Your real Self Assessment bill depends on your full tax position, allowable expenses, other income, reliefs and any adjustments. Always check your actual figures in your HMRC online account before making a payment. This tool does not give personalised tax advice.
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.

Instant download No subscription Full refund if not satisfied
Get the pack£3.99 one-off
About this calculator

Income tax and National Insurance as a sole trader

Sole traders pay income tax at the same rates as employees, but they also pay Class 4 National Insurance — not the combined employee-and-employer NI that applies to PAYE employment. Class 4 NI is 6% on profits between £12,570 and £50,270, and 2% above that threshold.

Both income tax and Class 4 NI are calculated on the same taxable profit figure and paid annually through Self Assessment. Class 2 NI was abolished from 6 April 2024, so only Class 4 applies for 2026/27.

Last updated July 2026. Written and reviewed by James Whitfield against current GOV.UK and HMRC guidance. Estimates for planning only — not tax, accounting or financial advice.

Sole trader NI and tax — questions

Do sole traders pay National Insurance?
Yes — Class 4 NI. Class 2 NI was abolished from 6 April 2024. Class 4 is calculated on taxable profit in the same Self Assessment return as income tax: 6% on profits from £12,570 to £50,270, and 2% above.
Do sole traders pay employer NI?
No. Employer National Insurance only applies when a business has employees on a payroll. A sole trader working alone has no employer NI liability on their own profit.
How is sole trader NI different from a limited company director's NI?
A sole trader pays Class 4 NI on profit. A limited company director can pay themselves a salary (subject to employee and employer NI) and dividends (NI-free). The limited company structure can reduce NI exposure at higher income levels.
Self-Employed Tax Calculator UK
Estimate income tax, Class 4 National Insurance and take-home pay from self-employed income for 2026/27. Covers freelancers, contractors and sole traders.
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.
Tax Set-Aside Calculator UK
Calculate how much to set aside each month from sole trader profit to cover income tax and National Insurance for 2026/27.
Take-Home Profit Calculator
Estimate how much of your sole trader profit remains after income tax, NI and optional deductions for 2026/27.
Self-Employed National Insurance Calculator
Estimate Class 4 National Insurance contributions from annual self-employed profit for 2026/27.
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.
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.

Figures reviewed for the 2026/27 tax year (last updated July 2026). Source: GOV.UK.

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 →