How much tax do you pay if you're self-employed?
The honest answer is "it depends on your profit", but that's not very useful when you're trying to budget. So here's a concrete breakdown at several profit levels for 2025-26, showing exactly where each pound goes. All figures use England, Wales and Northern Ireland rates and assume self-employment profit only, with no other income. Scottish taxpayers pay different Income Tax on the same profit, and the calculator has a Scotland setting.
The three things that come out
A self-employed person's bill has three parts: Income Tax, Class 4 National Insurance, and historically Class 2 National Insurance, which from 2024-25 is usually treated as paid rather than charged. The first £12,570 of profit is covered by your tax-free allowance, and sole traders never pay Corporation Tax. Income Tax and Class 4 both work in bands, so your marginal rate (the tax on your next pound) rises as profit grows.
Worked figures for 2025-26
| Profit | Income Tax | Class 4 NI | Total | Take-home % |
|---|---|---|---|---|
| £20,000 | £1,486 | £445.80 | £1,931.80 | ~90% |
| £30,000 | £3,486 | £1,045.80 | £4,531.80 | ~85% |
| £40,000 | £5,486 | £1,645.80 | £7,131.80 | ~82% |
| £50,000 | £7,486 | £2,245.80 | £9,731.80 | ~81% |
| £60,000 | £11,432 | £2,456.60 | £13,888.60 | ~77% |
| £75,000 | £17,432 | £2,756.60 | £20,188.60 | ~73% |
| £100,000 | £27,432 | £3,256.60 | £30,688.60 | ~69% |
These are rounded illustrations. Run your exact profit through the estimator for the precise pennies. But the shape tells the story: the more you earn, the bigger the share that goes in tax, because more of your profit sits in the 40% band and your Class 4 rate structure kicks in.
Your marginal rate
What often matters more than the average is the rate on your next pound of profit:
- Up to £12,570: no Income Tax, no Class 4.
- £12,570 to £50,270: 20% tax + 6% Class 4 = 26%.
- £50,270 to £125,140: 40% tax + 2% Class 4 = 42%.
- £100,000 to £125,140: add the allowance taper and the effective rate jumps to around 62%.
- Over £125,140: 45% tax + 2% Class 4 = 47%.
That £100k to £125k spike is the Personal Allowance taper at work, and it's the strongest argument for a pension contribution if your profit lands there.
How much to set aside
A rough rule for budgeting: on modest profits, put aside around 20% to 25% of what you earn; from the mid-range up, closer to 30% to 40%. Better still, calculate it. Knowing the real number lets you move that share into a separate savings pot as you go, so the January bill (and the payment on account that often comes with it) doesn't hurt. For a full line-by-line estimate for the current year, use the 2025-26 SA302 calculator guide, and see how to reduce your tax bill once you know the number.
If you have other income too
Salary, dividends, rent and savings all change the picture, because they stack with your profit and can push it into higher bands. The estimator lets you add each type separately, so a fuller answer to "how much will I pay" is only a few boxes away. To see how those figures are laid out on HMRC's calculation, look at our SA302 example.
Frequently asked questions
How much tax do you pay if you're self-employed?
Income Tax at 20%, 40% or 45% above the £12,570 Personal Allowance, plus Class 4 National Insurance at 6% on profit between £12,570 and £50,270 and 2% above. On £30,000 of profit in 2025-26 that totals £4,531.80 in England, Wales and Northern Ireland.
What percentage of my income should I save for tax when self-employed?
Roughly 20% to 25% on modest profits and 30% or more once you are in the higher-rate band. Working out the real figure for your profit is better than a rule of thumb.
Is self-employed tax worked out on turnover or profit?
On profit: your income minus allowable business expenses. Both Income Tax and Class 4 National Insurance are charged on profit.
Do self-employed people pay more tax than employees?
On the same earnings they usually pay less National Insurance, because Class 4 is 6% against 8% for employees, though they have no employer pension contributions or sick pay.