Sole trader tax calculator
See the income tax and National Insurance due on your sole-trader profit for 2025/26 — and how much you keep. England.
Assumes England rates and the standard personal allowance. Class 2 NIC is generally treated as paid where profits exceed the threshold. Beyond a certain profit, a limited company can save tax — we’ll model both for you.
In plain English
The terms, explained
New to this? Here’s what the words on this page actually mean.
- Profit
- Your income after allowable business expenses — the figure you’re taxed on.
- Income tax
- Tax on your profit at 20%, 40% or 45%, depending on how much you earn.
- Class 4 NIC
- National Insurance the self-employed pay on profits — 6% between £12,570 and £50,270, then 2%.
- Personal allowance
- The first £12,570 of income you can earn tax-free each year.
FAQ
Sole trader tax calculator — your questions answered
How much tax does a sole trader pay?
Income tax at 20%, 40% or 45% on profit above your £12,570 personal allowance, plus Class 4 National Insurance at 6% (then 2% on profit over £50,270). The calculator shows both, and what you keep.
How much should I set aside for tax as a sole trader?
A common rule of thumb is 25–30% of your profit, but it depends on how much you earn. The calculator gives you a “set aside per month” figure for your exact numbers so nothing catches you out.
What can I claim as a sole trader?
Allowable business expenses — equipment and tools, business travel and mileage, use of home, software, phone, insurance and professional fees — reduce your taxable profit. We make sure you claim everything you’re entitled to.
When do I pay my sole trader tax?
Through Self Assessment by 31 January after the tax year, with payments on account on 31 January and 31 July if your bill is over £1,000. We file early so you always know the figure in advance.
Should I become a limited company?
Beyond a certain profit level a limited company can save tax, but it adds admin and filing. We’ll model sole trader vs company for your numbers and only recommend the switch if it genuinely benefits you.
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