Self-Employed Income Tax Calculator

Your trading profit (income minus allowable expenses) is added to any other taxable income you have and taxed through the normal Income Tax bands, exactly like employment income. On top of that, you pay Class 4 National Insurance on your profit. There's no separate 'self-employed tax rate' - the same Income Tax bands apply whether income comes from a job, self-employment, or both.

It's the main National Insurance charge for self-employed people, calculated on your trading profit for the year. For 2026/27 it's charged at 6% on profits between £12,570 and £50,270, and 2% above that - broadly similar in shape to employee Class 1 National Insurance, but calculated purely on your self-employment profit rather than stacking with any employment income.

For most people, no. Compulsory Class 2 National Insurance was abolished from April 2024: if your profit is £7,105 or more, you're automatically credited with a qualifying year towards your State Pension at no cost. If your profit is below that threshold, Class 2 survives only as a voluntary payment (£3.65 a week for 2026/27) - worth considering if you want to protect your State Pension record for a low-profit year.

If your total trading income for the tax year is £1,000 or less, it's entirely tax-free and you don't need to declare it. If your income is higher, you can choose to deduct the flat £1,000 allowance instead of your actual expenses (useful if your real costs are low), or deduct your actual allowable expenses instead - whichever gives you a lower taxable profit. You can't use both in the same tax year. This is separate from, and works the same way as, the Property Allowance for rental income.

Costs wholly and exclusively for your self-employment: stock and materials, business mileage or vehicle running costs, tools and equipment, insurance, a proportion of home costs if you work from home, and professional fees like accountancy. It doesn't include your own wages or drawings, or personal expenses not related to the business.

Yes, if you have both. Your self-employment profit and your employment income are combined for Income Tax purposes (via Self Assessment), so your profit can be taxed at a higher marginal rate if your employment income already uses up your Personal Allowance and basic-rate band. Enter your other taxable income above to see the combined effect.

No - taxi and private hire drivers who work for themselves (rather than as an employee) are taxed under exactly the same self-employment rules as any other sole trader: Income Tax and Class 4/2 National Insurance on trading profit, with the same Trading Allowance choice. Common allowable expenses for drivers include fuel, vehicle insurance, licensing and PCO/badge fees, cleaning, and a proportion of vehicle finance or depreciation, though vehicle costs have specific rules depending on whether you use simplified mileage rates or actual costs.