Self-employed tax calculator
Income tax and Class 4 National Insurance on your profit — and the payment on account that makes the first 31 January bigger than the bill you worked out.
Your self-assessment bill
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| Income tax | — |
|---|---|
| Class 4 National Insurance | — |
| Student loan | — |
| Total for the year | — |
| Left after tax | — |
| Effective rate on profit | — |
| Set aside each month | — |
| Due 31 January | — |
| Due 31 July | — |
The January shock
Almost every self-employed tax calculator gives you one number: what you owe on the year. That number is right and it is not what HMRC asks for.
If your bill comes to £1,000 or more, HMRC also takes 50% of it as an advance on next year — on the same day, 31 January — and another 50% on 31 July. So in your first full year of trading you are asked for 150% of the figure you budgeted for, four months after the tax year ended.
On £40,000 of profit that is the difference between setting aside £7,132 and being asked for £10,698. People who have done everything right still get caught by this, because the calculator they used never mentioned it. From the second year onward the arithmetic settles down: you have already paid two instalments toward the year, so the January balance is smaller.
The rates
| Your profit | Income tax | Class 4 NI |
|---|---|---|
| Up to £12,570 | 0% | 0% |
| £12,570 to £50,270 | 20% | 6% |
| £50,270 to £125,140 | 40% | 2% |
| Above £125,140 | 45% | 2% |
Class 4 uses the same thresholds as employee National Insurance but charges 6% where an employee pays 8%. The gap is not generosity: no employer is paying a contribution alongside yours, and you have none of the statutory sick pay, holiday or redundancy rights that come with a job.
Class 2 is not on your bill any more
Since 6 April 2024, Class 2 National Insurance is no longer charged to the self-employed as a compulsory contribution. If your profits are at or above the Small Profits Threshold of £7,105, the year is treated as paid and still counts toward your State Pension.
Below £7,105 you can pay it voluntarily — £3.65 a week for 2026/27 — and it is usually worth doing, because a qualifying year of State Pension costs far less this way than buying it back later. This calculator does not add Class 2 to your bill, because HMRC does not.
The £100,000 cliff
Between £100,000 and £125,140 of profit, the personal allowance is withdrawn at £1 for every £2 earned. The marginal rate over that band is 60%, not 40% — and with Class 4 on top, 62%. A pension contribution made inside that band is the most efficient one you will ever make. The calculator above applies the taper, which is a step many do not.
Common questions
How much tax will I pay on £40,000 self-employed profit?
About £7,132 for 2026/27 — £5,486 income tax and £1,646 Class 4 National Insurance. But if this is your first full year, HMRC asks for £10,698 on 31 January, because a payment on account of half the bill falls due on the same day.
What is a payment on account?
An advance on next year's tax. If your bill is £1,000 or more, HMRC takes 50% of it on 31 January alongside the bill itself, and another 50% on 31 July. In a first full year that means paying 150% of what you calculated.
Do I still pay Class 2 National Insurance?
Not as a compulsory charge. Profits at or above £7,105 are credited without payment. Below that you can pay voluntarily at £3.65 a week to protect a qualifying year. A calculator still adding about £3.45 a week is using an out-of-date figure.
How much should I put aside each month for tax?
Dividing the annual bill by twelve is the honest floor, and it under-saves in a first full year because of payments on account. The calculator shows both numbers so you can see the gap.
What is the difference between Class 4 and employee National Insurance?
Identical bands, lower main rate: 6% against 8% between £12,570 and £50,270, and 2% above £50,270 for both.
Does this include the trading allowance?
No — enter your profit after expenses. If your total self-employed income is under £1,000, the trading allowance usually means there is nothing to report at all.
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