How much tax does a sole trader pay in the UK?

On profits above the Personal Allowance (£12,570), Income Tax is 20% basic, 40% higher and 45% additional for 2026/27 (England/Wales) (GOV.UK, Income Tax rates and Personal Allowances). You also pay Class 4 National Insurance at 6% between £12,570 and £50,270 and 2% above (GOV.UK, National Insurance rates for the self-employed). Class 2 is no longer a mandatory charge.

What is the difference between turnover and profit?

Turnover is everything you invoice. Taxable profit is turnover minus allowable business expenses. Tax and NIC are calculated on profit, not turnover.

Do sole traders still pay Class 2 National Insurance?

Class 2 is no longer a separate mandatory bill for most people. If profits are above the small-profits threshold, Class 2 is treated as paid for your National Insurance record. Class 4 on profits is what you actually calculate and pay.

Does this calculator work for Scotland?

No: it uses England/Wales Income Tax bands. Scotland has different starter/basic/intermediate/higher bands. NIC rules are UK-wide, but the tax half of the result will be wrong for Scottish taxpayers.

Are payments on account included?

No. Self Assessment often requires payments on account toward next year's bill. This tool shows a simple annual tax + NIC estimate for planning your day rate and pricing, not a full Self Assessment forecast.

Free Sole Trader Take-Home Calculator

Estimate sole-trader take-home pay after Income Tax and Class 4 National Insurance for the UK (England/Wales).

Enter annual turnover and expenses to see taxable profit, Income Tax, Class 4 NIC and estimated take-home for 2026/27. England/Wales bands; Scotland differs. Not tax advice: confirm with HMRC or an accountant.

Use calculator Get started

Sole Trader Take-Home Calculator results

Fill in the details and select Calculate to see your figures.

Win more of the jobs you quote.

Tradehand is the software your trade business runs on, with an assistant that answers every call and message, sends your quotes the same day and chases them until they land. The first £10,000 Tradehand collects for a business carries no Tradehand fee. After that, Tradehand earns 5% of collected invoice payments. No monthly fee, setup fee, card fee or contract.

Get started

How to use the Sole Trader Take-Home Calculator

1Enter your expected annual turnover (self-employed income before expenses).
2Subtract allowable business expenses to get taxable profit.
3Optionally select a student loan plan if you repay one.
4Read take-home after Income Tax and Class 4 NIC (Class 2 is no longer mandatory).
5Use this for planning only: Self Assessment, payments on account and Scotland bands may differ.

How the Sole Trader Take-Home Calculator works

Sole-trader take-home is profit after Income Tax and Class 4 National Insurance (and student loan if it applies).

taxable profit = turnover − expenses → take-home = profit − income tax − Class 4 [− student loan]

Turnover £45,000 − expenses £5,000 = £40,000 profit.
Personal Allowance £12,570 → taxable £27,430 at 20% = £5,486 Income Tax.
Class 4: 6% × (£40,000 − £12,570) = £1,645.80.
Take-home ≈ £40,000 − £5,486 − £1,646 = £32,868 (~£2,739/month).

Estimate for a sole trader in England/Wales, 2026/27. Excludes student loan unless selected, payments on account, and Scotland's different income-tax bands. Not tax advice: confirm with HMRC or an accountant.

Typical UK benchmarks

Personal Allowance	£12,570 tax-free before Income Tax applies (GOV.UK, Income Tax rates and Personal Allowances, 2026/27)
Basic-rate band to	Basic rate 20% on income up to £50,270 total (£37,700 taxable after the standard Personal Allowance); higher rate 40% up to £125,140; additional rate 45% above (GOV.UK, Income Tax rates and Personal Allowances, 2026/27)
Class 4 main rate	Class 4 National Insurance: 6% on profits between £12,570 and £50,270, 2% above £50,270 (GOV.UK, National Insurance rates for the self-employed, 2026/27)

Disclaimer

This tool gives an estimate for general guidance only, based on typical UK figures and the details you enter. It is not a formal quote, survey, or professional advice. Always confirm with a qualified tradesperson before relying on any figure, as regional prices, site conditions, and current standards vary.

You do the job, Tradehand handles everything around it.

Your assistant sends the quotes, chases the invoices, books the work and keeps your customers updated. The first £10,000 Tradehand collects for a business carries no Tradehand fee. After that, Tradehand earns 5% of collected invoice payments. No monthly fee, setup fee, card fee or contract. One office hire costs about £25,000 a year, whether the invoices land or not.

Source: Office manager salary, National Careers Service

Get started