Sole Trader Tax Calculator UK 2025/26
Use this sole trader tax calculator to estimate the 2025/26 UK Income Tax and Class 4 National Insurance on your sole trader profit, with an optional PAYE salary on top.
Tax year: 2024/25 | 2025/26 | 2026/27
Last verified against GOV.UK rates: 7 May 2026.
Methodology: this calculator uses the main Income Tax rates for England, Wales and Northern Ireland, the standard Personal Allowance, and self-employed Class 4 National Insurance rates. It does not cover Scottish Income Tax bands, student loans, pension contributions, VAT, benefits, tailored reliefs, or personal tax advice.
Important: Income tax bands are different if you live in Scotland.
Calculated estimate
Tax Calculation Results
- Estimated take-home profit
- ~£
- Additional Income Tax
- ~£
- National Insurance
- ~£
| Main Income: | £ |
| Side Hustle Income: | £ |
| Side Hustle Expenses: | £ |
| Side Hustle Profit: | £ |
| Estimated Additional Income Tax: | ~£ |
| Estimated National Insurance Contributions: | ~£ |
| Estimated Total Additional Tax (Income Tax + NI): | ~£ |
| Estimated Effective Tax Rate (Income Tax + NI): | % |
Based on this gross side hustle income, Making Tax Digital may apply from . Check HMRC guidance because digital records and quarterly updates may be required.
How this sole trader tax calculator works
A sole trader is a self-employed individual running their own business in their own name. HMRC taxes sole traders on profit (income minus allowable expenses) through Self Assessment, on top of any PAYE salary in the same tax year.
Enter your gross sole trader income, the allowable expenses or £1,000 trading allowance you want to model, and any PAYE salary. The calculator runs entirely in your browser. Nothing about your figures is sent to a server or analytics.
Use it as a sole trader income tax calculator for the current tax year, an income tax calculator sole trader contractors can plug their day-rate into, or a quick UK sole trader tax calculator before you commit to a new client or contract.
Sole trader profit is added to any other taxable income, so your marginal tax band depends on the combined total. For 2025/26 the Personal Allowance is £12,570, the basic rate is 20% to £50,270, the higher rate is 40% to £125,140, and the additional rate is 45% above that (England, Wales, Northern Ireland).
- Use Side Hustle Income for gross income before expenses or allowances.
- Use Side Hustle Expenses for allowable expenses, or for the deduction you want to model, such as the trading allowance.
- Use Annual Salary for your PAYE salary before tax.
Trading Allowance vs Actual Expenses
The trading allowance can exempt up to £1,000 of gross trading income. If your gross trading income is £1,000 or less, you may not need to tell HMRC, although some circumstances still require a tax return.
If gross trading income is more than £1,000, you can usually choose between deducting the £1,000 trading allowance or deducting actual allowable expenses. You cannot claim both for the same trade.
Self Assessment registration and deadlines
If you cross the £1,000 trading allowance you normally need to register for Self Assessment by 5 October after the tax year ends, and file online by 31 January after the tax year. See the main Self Assessment registration and deadlines section for the 2025/26 dates and payments-on-account rules.
Official Sources
Worked examples: sole trader tax for 2025/26
Example 1
Full-time sole trader with £28,000 of trading income and £3,200 of allowable expenses. Profit of £24,800 sits in the basic-rate band, so the bill is roughly 20% Income Tax above £12,570 plus 6% Class 4 NI on profit above £12,570, with Class 2 NI treated as paid because profits clear the Small Profits Threshold.
Example 2
Side-hustle sole trader with a £42,000 PAYE salary and £8,000 of sole trader profit after expenses. The salary uses most of the basic-rate band, so some sole trader profit crosses into 40% Income Tax. Class 4 NI on the trading profit is charged separately through Self Assessment.
Example 3
Higher-earning sole trader contractor with £75,000 of profit. The first slice is taxed at 20%, the rest at 40% up to £125,140, with Class 4 NI at 6% to £50,270 and 2% above. A Self Assessment bill of this size will normally trigger payments on account for the following year.
FAQs
What does this sole trader tax calculator estimate?
It estimates 2025/26 UK Income Tax and Class 4 National Insurance on sole trader profit, optionally combined with a PAYE salary. It uses the rates and thresholds that apply in England, Wales and Northern Ireland. Scottish Income Tax bands differ — use the Scottish side hustle tax calculator if you live in Scotland.
Do sole traders pay Class 2 National Insurance in 2025/26?
From April 2024 onwards, sole traders with profits at or above the Small Profits Threshold (£6,725) are treated as having paid Class 2 NI without any cash payment, which still builds State Pension entitlement. Below that threshold you can pay voluntary Class 2 NI at £3.50 per week to protect your contributions record.
How is Class 4 National Insurance worked out for sole traders?
Class 4 NI is charged on sole trader profit through Self Assessment. For 2025/26 the rate is 6% on profit between £12,570 and £50,270, then 2% on profit above £50,270. It is separate from any Class 1 NI deducted from a PAYE salary.
Which expenses can a sole trader claim?
Sole traders can deduct costs that are wholly and exclusively for the business — for example stock, materials, business travel and mileage, software and subscriptions, professional fees, business insurance, and a proportion of home and phone costs where used for work. Personal-use elements should be excluded or apportioned.
When do payments on account apply to sole traders?
Payments on account apply when your Self Assessment bill is at least £1,000 and less than 80% of your tax was collected through PAYE or other means. HMRC asks for two equal payments toward the following year's bill, due 31 January and 31 July, each one half of the previous year's Self Assessment liability.
Should I use the £1,000 trading allowance or actual expenses?
If gross sole trader income is £1,000 or less, the trading allowance usually covers it. Above £1,000, you can choose either the £1,000 allowance or your actual allowable expenses for the same trade, not both. Pick whichever gives the larger deduction.
Is this different from the employed and self-employed tax calculator?
The employed and self-employed page is framed around someone with a PAYE day job plus self-employment income. This sole trader page is framed around running a sole trader business — full-time or alongside a salary — with explicit Class 2 NI, Class 4 NI, expenses and payments on account guidance. The underlying calculator is the same; only the copy and FAQs differ.
Does this work as an income tax calculator for sole trader contractors?
Yes, provided you trade as a sole trader rather than through a limited company. It does not model IR35 deemed-employment income, CIS deductions, VAT, dividends, or partnership-specific rules. For those scenarios use a specialist tool or speak to an accountant.
More Side Hustle Tax Calculators
Compare other side-hustle scenarios using the same privacy-safe calculator. If you also want a general view across PAYE plus any additional earnings, use the UK extra income tax calculator.