Sole trader tax calculator
Enter your income and expenses to see your Self Assessment bill for 2026/27, how much to put aside each month and what's due when.
Your result appears here as you type.
An estimate from the figures you entered. It is not financial advice.
What a sole trader pays in 2026/27
| Profit | Income tax | Class 4 NI |
|---|---|---|
| Up to £12,570 | 0% | 0% |
| £12,571 to £50,270 | 20% | 6% |
| £50,271 to £125,140 | 40% | 2% |
| Over £125,140 | 45% | 2% |
Scottish taxpayers pay the Scottish rates on profit instead, but Class 4 NI is the same across the UK.
How this is calculated
Profit is income less expenses (or less £1,000 if you use the trading allowance). If you also have a job, your salary uses up the personal allowance and lower bands first, so the calculator works out the extra tax caused by your profit. Class 4 is on profit alone. The monthly figure is the bill divided by 12. The payment dates assume this is your first year in Self Assessment, with payments on account if the bill is over £1,000.
Worked example: a plasterer making £36,000 profit
Dan invoices £42,000 and spends £6,000 on materials, van costs and insurance.
- Profit: £36,000
- Income tax: (£36,000 − £12,570) at 20% = £4,686
- Class 4 NI: (£36,000 − £12,570) at 6% = £1,405.80
Dan's bill is £6,091.80, so he should put aside about £508 a month. In his first year he pays the £6,091.80 plus a £3,045.90 payment on account on 31 January 2028, and another £3,045.90 on 31 July 2028.
Questions people ask
How much tax does a sole trader pay in 2026/27?
Income tax at 20%, 40% and 45% on profit above the £12,570 personal allowance (Scottish rates if you live in Scotland), plus Class 4 National Insurance at 6% on profit between £12,570 and £50,270 and 2% above that.
Do sole traders still pay Class 2 National Insurance?
Not if your profit is £7,105 or more. You are treated as having paid it, so you still build up State Pension years. Below £7,105 you can choose to pay voluntary Class 2 at £3.65 a week to protect your record.
What is the £1,000 trading allowance?
If your trading income is £1,000 or less you don’t need to tell HMRC. If it’s more, you can deduct a flat £1,000 instead of your actual expenses, which helps if your costs are very low.
How much should I put aside for tax as a sole trader?
Work out your likely tax and Class 4 bill and divide it by 12 to save monthly. For a basic rate sole trader that is often around 20% to 25% of profit above the personal allowance once NI is included.
What are payments on account?
If your Self Assessment bill is over £1,000 and less than 80% of your tax was taken at source, HMRC asks for advance payments towards next year: half on 31 January and half on 31 July. In your first year this means paying up to 150% of the bill by 31 January.
Sources
Rates and review
Uses rates for the 2026/27 tax year. Figures last checked against the sources on 25 October 2026.
Written by author to be named. Reviewed by qualified reviewer to be named.
See how we calculate and the disclaimer. Spotted a wrong figure? Report a problem.