Self-Employed Tax Calculator

Why I built this one

I'm self-employed myself, and the question I hear most from other freelancers isn't "how much tax do I pay?" but "how much should I be putting aside?" The answer is never a neat 20%, and in your first year it's a lot more than you'd think, because of payments on account.

This calculator answers both: what you owe on a year's profit, and when HMRC will actually collect it.

What you pay on self-employed profit

• Income tax - the same bands as employees. Nothing on the first £12,570, then 20%, 40% and 45% in England, Wales and Northern Ireland, or Scotland's six bands from 19% to 48%.
• Class 4 National Insurance - 6% on profits between £12,570 and £50,270, and 2% above that.
• Class 2 National Insurance - no longer compulsory. If your profits are under £7,105, you can pay it voluntarily at £3.65 a week to keep your State Pension record building.
• Student loan - 9% of income over your plan's threshold, collected through Self Assessment rather than payroll.

Payments on account: the first-year shock

If your tax and Class 4 bill is £1,000 or more, HMRC asks you to pay towards next year's bill in advance, in two halves:

• 31 January - your balancing payment for the year just gone, plus the first payment on account for the current year
• 31 July - the second payment on account

Each payment on account is half of the previous year's income tax and Class 4. Student loan repayments are never included.

The catch comes in your first year. Say you earn £40,000 profit in 2026/27 in England. Your bill is £7,131.80. Nothing is due until 31 January 2028 - but then HMRC wants the whole £7,131.80 plus a first payment on account of £3,565.90 for 2027/28. That's £10,697.70 in one go, followed by another £3,565.90 in July.

After that first year it settles into a rhythm, and each January and July payment is roughly half the year's bill. If your profit drops, you can ask HMRC to reduce your payments on account - but if you reduce them too far, you'll pay interest on the shortfall.

How much to set aside

The simplest habit that works is to move a fixed percentage of every payment you receive into a separate savings account the day it arrives. Use the "share of profit" figure above as your percentage, rounded up a little for safety. In your first year, put aside around half as much again on top, to cover the first payment on account.

My guide to setting money aside for tax as a freelancer goes through this in more detail.

What the calculator leaves out

• Other income - a salary from a part-time job uses up your personal allowance and lower bands first, so your self-employed profit is taxed more. If you have both, add them together in the take-home pay calculator for a rough idea of the income tax.
• Expenses and allowances - enter profit after expenses. The £1,000 trading allowance and capital allowances aren't worked out for you.
• Pension contributions - personal pension payments extend your basic rate band and can reduce your bill.
• Limited companies - if you trade through a company, you pay corporation tax and take salary and dividends instead, which works completely differently.
• VAT - registration is compulsory once your turnover goes over £90,000.