Self-Employed Tax Calculator Methodology

What this calculator does

Takes annual profit (after allowable expenses), pension contributions, and any other income. Returns income tax, Class 4 National Insurance, and take-home profit.

The formula

Taxable profit = annual profit − pension contributions − personal allowance

Income tax (2025/26 England/Wales/NI):
  Personal allowance:      £12,570
  Basic rate (20%):        on £12,571 – £50,270
  Higher rate (40%):       on £50,271 – £125,140
  Additional rate (45%):   above £125,140

Class 4 National Insurance (2025/26):
  6% on profit between £12,570 and £50,270
  2% on profit above £50,270

Class 2 NI: abolished from 6 April 2024 — no longer due.

Total tax  = income tax + Class 4 NI
Take-home  = profit − total tax

Assumptions

The full year is self-employed with no employed income alongside self-employment.
Profit figure entered is after all allowable business expenses.
England, Wales, and Northern Ireland income tax rates apply — Scottish rates differ.

Data sources

Figure	Value used	Source	Last checked
Personal allowance	£12,570	HMRC — Income Tax rates	May 2026
Basic rate band	£12,571–£50,270	HMRC — Income Tax rates	May 2026
Class 4 lower rate	6%	HMRC — Self-employed NI rates	May 2026
Class 4 upper rate	2%	HMRC — Self-employed NI rates	May 2026
Class 4 lower threshold	£12,570	HMRC — Self-employed NI rates	May 2026
Class 4 upper threshold	£50,270	HMRC — Self-employed NI rates	May 2026

Limitations

Assumes the full year is self-employed with no employed income; mixing employment and self-employment income will affect NI calculations.
Does not model payment on account dates (January and July instalments).
Does not account for VAT.
Does not cover Scottish income tax rates — use the income tax calculator with the Scotland option for a Scottish-specific result.

Worked example

Annual profit £45,000, no pension contributions.

Taxable profit: £45,000 − £12,570 = £32,430
Income tax:     £32,430 × 20%     = £6,486

Class 4 NI:     (£45,000 − £12,570) × 6% = £32,430 × 6% = £1,946

Total tax:      £6,486 + £1,946 = £8,432
Take-home:      £45,000 − £8,432 = £36,568

Changelog

Date	Change
May 2026	Initial publication

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Self-Employed Tax Calculator — Methodology