Sole Trader Tax Calculator UK 2026/27
Estimate tax on your sole trader profit after expenses or the eligible trading allowance. See Income Tax and Class 4 NI separately; PAYE salary is optional.
Income Tax uses England, Wales and Northern Ireland bands. Class 4 NI uses trading profit separately from salary. Scottish taxpayer? Use Scottish rates. Methodology and limitations · Filing deadlines
Calculated estimate
Tax Calculation Results
This estimate used Scottish income tax bands because Scotland is selected.
- Estimated take-home profit
- ~£
- Additional Income Tax
- ~£
- National Insurance
- ~£
| Main Income: | £ |
| Side Hustle Income: | £ |
| Deduction used: | £ |
| Side Hustle Profit: | £ |
| Estimated Additional Income Tax: | ~£ |
| Estimated National Insurance Contributions: | ~£ |
| Estimated Total Additional Tax (Income Tax + NI): | ~£ |
| Estimated Effective Tax Rate (Income Tax + NI): | % |
This estimates additional tax on trading profit, not your total Self Assessment bill. It excludes student loans, pensions, benefits, VAT, loss relief, tailored tax codes and Class 1/Class 4 annual NI maximum adjustments. Class 2 is not added to the bill. Payments on account may affect cash due. Check MTD assessment years and exemptions; this result does not determine eligibility.
How this sole trader tax calculator works
A sole trader is a self-employed individual running their own business in their own name. HMRC taxes sole traders on profit (income minus allowable expenses) through Self Assessment, on top of any PAYE salary in the same tax year.
Enter your gross sole trader income, your actual allowable expenses or select the eligible trading allowance, and any PAYE salary. The calculator runs entirely in your browser. Nothing about your figures is sent to a server or analytics.
Use it as a sole trader income tax calculator for the current tax year, an income tax calculator sole trader contractors can plug their day-rate into, or a quick UK sole trader tax calculator before you commit to a new client or contract. The sole trader tax rates table further down the page sets out every 2026/27 Income Tax band, Class 4 NI rate and Class 2 NI threshold the calculator uses.
If you are comparing sole trader with freelancer, small business or self-employed, the self-employed terminology guide explains the differences, or you can jump straight to the sole trader tax calculator on this page.
Sole trader profit is added to any other taxable income, so your marginal tax band depends on the combined total. For 2026/27 the Personal Allowance is £12,570, the basic rate is 20% to £50,270, the higher rate is 40% to £125,140, and the additional rate is 45% above that (England, Wales, Northern Ireland). The sole trader tax rate is not a separate flat rate — it follows your Income Tax band plus Class 4 National Insurance on profit above the lower limit.
- Use Side Hustle Income for gross income before expenses or allowances.
- Use Side Hustle Expenses for actual allowable expenses; select the trading allowance separately if eligible.
- Use Annual Salary for your PAYE salary before tax.
Trading Allowance vs Actual Expenses
The trading allowance can exempt up to £1,000 of gross trading income. If your gross trading income is £1,000 or less, you may not need to tell HMRC, although some circumstances still require a tax return.
If gross trading income is more than £1,000, you can usually choose between deducting the £1,000 trading allowance or deducting actual allowable expenses. You cannot claim both for the same trade.
Self Assessment registration and deadlines
If you cross the £1,000 trading allowance you normally need to register for Self Assessment by 5 October after the tax year ends, and file online by 31 January after the tax year. See the main Self Assessment registration and deadlines section for year-specific dates and payments-on-account rules.
Budget for payments on account · MTD assessment years · Higher-rate tax explained
Official Sources
Worked examples: sole trader tax for 2026/27
Example 1
Full-time sole trader with £28,000 of trading income and £3,200 of allowable expenses. Profit of £24,800 sits in the basic-rate band, so the bill is roughly 20% Income Tax above £12,570 plus 6% Class 4 NI on profit above £12,570, with Class 2 NI treated as paid because profits clear the Small Profits Threshold.
Example 2
Side-hustle sole trader with a £45,000 PAYE salary and £8,000 of sole trader profit after expenses. The salary uses most of the basic-rate band, so some sole trader profit crosses into 40% Income Tax. Class 4 NI on the trading profit is charged separately through Self Assessment.
Example 3
Higher-earning sole trader contractor with £75,000 of profit. The first slice is taxed at 20%, the rest at 40% up to £125,140, with Class 4 NI at 6% to £50,270 and 2% above. A Self Assessment bill of this size will normally trigger payments on account for the following year.
FAQs
What does this sole trader tax calculator estimate?
It estimates 2026/27 UK Income Tax and Class 4 National Insurance on sole trader profit, optionally combined with a PAYE salary. It uses the rates and thresholds that apply in England, Wales and Northern Ireland. Scottish Income Tax bands differ — use the sole trader tax calculator Scotland page if you live in Scotland.
What is the sole trader tax rate in 2026/27?
There is no separate sole trader tax rate. Sole trader profit is taxed at the same Income Tax rates as employment income — 0% up to the £12,570 Personal Allowance, 20% basic rate to £50,270, 40% higher rate to £125,140, and 45% additional rate above £125,140 in England, Wales and Northern Ireland — plus Class 4 National Insurance at 6% on profit between £12,570 and £50,270 and 2% above £50,270. Class 2 NI is treated as paid once profit clears the Small Profits Threshold of £7,105 for 2026/27. The rate table below shows every band the calculator applies.
Do sole traders pay Class 2 National Insurance in 2026/27?
From April 2024 onwards, sole traders with profits at or above the Small Profits Threshold (£7,105 for 2026/27) are treated as having paid Class 2 NI without any cash payment, which still builds State Pension entitlement. Below that threshold you can pay voluntary Class 2 NI at £3.65 per week to protect your contributions record.
How is Class 4 National Insurance worked out for sole traders?
Class 4 NI is charged on sole trader profit through Self Assessment. For 2026/27 the rate is 6% on profit between £12,570 and £50,270, then 2% on profit above £50,270. It is separate from any Class 1 NI deducted from a PAYE salary.
Which expenses can a sole trader claim?
Sole traders can deduct costs that are wholly and exclusively for the business — for example stock, materials, business travel and mileage, software and subscriptions, professional fees, business insurance, and a proportion of home and phone costs where used for work. Personal-use elements should be excluded or apportioned.
When do payments on account apply to sole traders?
Payments on account apply when your Self Assessment bill is at least £1,000 and 80% or less of your tax was collected through PAYE or other means. HMRC asks for two equal payments toward the following year's bill, due 31 January and 31 July, each one half of the previous year's Self Assessment liability.
Should I use the £1,000 trading allowance or actual expenses?
If your gross sole trader income is £1,000 or less you usually do not need to tell HMRC. Above £1,000 you can claim the £1,000 trading allowance instead of actual expenses, but not both. Run the calculator twice — once with the eligible trading allowance selected, once with your real allowable costs — and use whichever gives the lower Income Tax + Class 4 NI bill.
More Side Hustle Tax Calculators
Compare other side-hustle scenarios using the same privacy-safe calculator. If you also want a general view across PAYE plus any additional earnings, use the UK extra income tax calculator.
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- Scottish self-employed tax calculator
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2026/27 rates used by this calculator
Standard Personal Allowance: £12,570. It reduces by £1 for every £2 of income above £100,000. Pension and other adjustments are outside this estimate.
| Band | Band width after Personal Allowance | Income Tax rate |
|---|---|---|
| Basic | First £37,700 | 20% |
| Higher | Next £87,440 | 40% |
| Additional | Remaining taxable income | 45% |
Class 4 NI is 6% on annual self-employed profit above £12,570 up to £50,270, then 2% above £50,270. PAYE salary does not consume these profit bands. The estimate does not apply Class 1/Class 4 annual maximum adjustments.
Class 2 is treated as paid at profits of £7,105 or more; below this, voluntary Class 2 is £3.65 per week. It is not included in the calculated bill.
Income Tax rates · Scottish rates · Current and archived NI rates