How Much Tax Will I Pay Self-Employed? UK 2025/26 Guide

"How much tax will I actually pay?" — it's the question every new freelancer and sole trader asks. The answer depends on your profit level, but it's probably less terrifying than you think.

This guide breaks it down with real numbers at common income levels, so you can see exactly what you'll owe.

The Three Taxes You Pay

As a self-employed person in the UK, you pay three things:

1. Income Tax — on your profits above the Personal Allowance
2. Class 2 National Insurance — a flat weekly rate
3. Class 4 National Insurance — a percentage of your profits

You do not pay employer's NI (that's only for employed people), and you don't pay employee's NI (Class 1). The self-employed NI rates are lower than employment NI — one of the few advantages of being self-employed.

2025/26 Tax Rates and Thresholds

Tax	Rate	Threshold
Personal Allowance	0%	First £12,570
Basic rate income tax	20%	£12,571 – £50,270
Higher rate income tax	40%	£50,271 – £125,140
Additional rate income tax	45%	Over £125,140
Class 2 NI	£3.45/week	Profits over £6,725
Class 4 NI	6%	£12,570 – £50,270
Class 4 NI (upper)	2%	Above £50,270

For full NI details, see our National Insurance guide.

Real Examples: Tax at Every Level

These assume self-employment is your only income and you're claiming no special reliefs. "Profit" means turnover minus allowable expenses.

Profit: £15,000

Income Tax	20% on £2,430 (£15,000 – £12,570)	£486
Class 2 NI	£3.45 × 52 weeks	£179
Class 4 NI	6% on £2,430	£146
Total tax		£811
Take-home		£14,189
Effective tax rate		5.4%

Profit: £25,000

Income Tax	20% on £12,430	£2,486
Class 2 NI	£3.45 × 52	£179
Class 4 NI	6% on £12,430	£746
Total tax		£3,411
Take-home		£21,589
Effective tax rate		13.6%

Profit: £35,000

Income Tax	20% on £22,430	£4,486
Class 2 NI	£3.45 × 52	£179
Class 4 NI	6% on £22,430	£1,346
Total tax		£6,011
Take-home		£28,989
Effective tax rate		17.2%

Profit: £50,000

Income Tax	20% on £37,430 + £0 at 40%	£7,486
Class 2 NI	£3.45 × 52	£179
Class 4 NI	6% on £37,430	£2,246
Total tax		£9,911
Take-home		£40,089
Effective tax rate		19.8%

Profit: £80,000

Income Tax	20% on £37,700 + 40% on £29,730	£19,432
Class 2 NI	£3.45 × 52	£179
Class 4 NI	6% on £37,700 + 2% on £29,730	£2,857
Total tax		£22,468
Take-home		£57,532
Effective tax rate		28.1%

How to Reduce Your Tax Bill

The single biggest way to reduce your tax is to claim all your allowable expenses. Many new freelancers leave money on the table by not claiming legitimate costs.

Quick Wins

• Working from home allowance: Claim £6/week (£312/year) with no receipts needed, or calculate actual costs for more
• Mileage allowance: 45p per mile for the first 10,000 business miles
• Software and subscriptions: Adobe, Slack, Zoom, accounting software — all deductible
• Phone and internet: Business proportion of your bills
• Pension contributions: Reduce your taxable income pound for pound

Bigger Strategies

• Capital allowances: Write off equipment (laptops, cameras, desks) against your tax bill
• Timing purchases: Buy equipment before year-end to bring expenses into this tax year
• Incorporate: At higher income levels (roughly £50k+), a limited company structure can be more tax-efficient
• Marriage Allowance: Transfer £1,260 of unused personal allowance from a non/low-earning spouse — saves up to £252

Read our complete expenses guide for the full list of what you can claim.

Don't Forget Payments on Account

If your tax bill exceeds £1,000, HMRC charges payments on account — advance payments towards next year's bill. This means your first January payment is 150% of one year's tax.

At £35,000 profit, that's:

• January 2027: £6,011 (this year) + £3,006 (50% advance) = £9,017
• July 2027: £3,006 (second advance payment)

Budget for this. Open a separate savings account and put aside 25-30% of every payment you receive.

Use Our Free Tax Calculator

Want an instant answer? Use our free self-employed tax calculator to see your exact bill based on your profit level. It accounts for income tax, Class 2 NI, and Class 4 NI.

When to File and Pay

• Register: Within 3 months of starting self-employment — registration guide
• File online: By 31 January after the tax year ends
• Pay: By 31 January (plus payments on account in January and July)

For a complete walkthrough of the filing process, see our Self-Assessment tax return guide.