The most common question freelancers ask: "How much tax will I actually pay?"
Below are full worked examples at six income levels, showing exactly how Income Tax, National Insurance, and take-home pay are calculated for the 2025/26 tax year. No jargon, just numbers.
As self-employed, you pay tax on your profit (income minus allowable expenses). You pay two types of tax:
Both are collected through your self-assessment tax return.
| Profit | Income Tax | NICs | Total Tax | Take-Home | Effective Rate |
|---|---|---|---|---|---|
| £15,000 | £486 | £325 | £811 | £14,189 | 5.4% |
| £25,000 | £2,486 | £926 | £3,412 | £21,588 | 13.6% |
| £35,000 | £4,486 | £1,526 | £6,012 | £28,988 | 17.2% |
| £50,000 | £7,486 | £2,426 | £9,912 | £40,088 | 19.8% |
| £75,000 | £17,432 | £2,926 | £20,358 | £54,642 | 27.1% |
| £100,000 | £27,432 | £3,426 | £30,858 | £69,142 | 30.9% |
Assumes no other income, standard personal allowance, no student loan. Use our calculator for your exact figures →
You're freelancing part-time alongside employment, or you've just started out. Your business profit after expenses is £15,000.
| Taxable profit | £15,000 |
| Personal allowance | −£12,570 |
| Taxable at 20% | £2,430 × 20% = £486 |
| Class 2 NICs (£3.45/week × 52) | £179 |
| Class 4 NICs (6% on £12,570–£15,000) | £2,430 × 6% = £146 |
| Total tax | £811 |
| Take-home | £14,189 (94.6%) |
💡 Set aside: ~£70/month into a separate account for your tax bill.
| Taxable profit | £25,000 |
| Personal allowance | −£12,570 |
| Taxable at 20% | £12,430 × 20% = £2,486 |
| Class 2 NICs | £179 |
| Class 4 NICs (6% on £12,570–£25,000) | £12,430 × 6% = £746 |
| Total tax | £3,412 |
| Take-home | £21,588 (86.4%) |
💡 Set aside: ~£285/month. At this level, claiming all allowable expenses is critical — every £100 in expenses saves you £26 in tax.
| Taxable profit | £35,000 |
| Personal allowance | −£12,570 |
| Taxable at 20% | £22,430 × 20% = £4,486 |
| Class 2 NICs | £179 |
| Class 4 NICs (6% on £12,570–£35,000) | £22,430 × 6% = £1,346 |
| Total tax | £6,012 |
| Take-home | £28,988 (82.8%) |
💡 Set aside: ~£500/month. Consider pension contributions — every £1 you put in a pension reduces your taxable profit by £1.
| Taxable profit | £50,000 |
| Personal allowance | −£12,570 |
| Taxable at 20% (up to £37,700) | £37,430 × 20% = £7,486 |
| Class 2 NICs | £179 |
| Class 4 NICs (6% on £12,570–£50,000) | £37,430 × 6% = £2,246 |
| Total tax | £9,912 |
| Take-home | £40,088 (80.2%) |
💡 Set aside: ~£826/month. At £50,270 you hit the higher rate band. Pension contributions before the year end can keep you in the basic rate band.
| Taxable profit | £75,000 |
| Personal allowance | −£12,570 |
| Basic rate (20% on first £37,700) | £37,700 × 20% = £7,540 |
| Higher rate (40% on £50,270–£75,000) | £24,730 × 40% = £9,892 |
| Income Tax total | £17,432 |
| Class 2 NICs | £179 |
| Class 4 NICs (6% on £12,570–£50,270) | £37,700 × 6% = £2,262 |
| Class 4 NICs (2% on £50,270–£75,000) | £24,730 × 2% = £495 |
| Total tax | £20,358 |
| Take-home | £54,642 (72.9%) |
💡 Set aside: ~£1,697/month. At this level, consider whether incorporating as a limited company could reduce your tax bill. The breakeven point is typically around £40-50k profit.
| Taxable profit | £100,000 |
| Personal allowance | −£12,570 |
| Basic rate (20% on first £37,700) | £37,700 × 20% = £7,540 |
| Higher rate (40% on £50,270–£100,000) | £49,730 × 40% = £19,892 |
| Income Tax total | £27,432 |
| Class 2 NICs | £179 |
| Class 4 NICs (6% on £12,570–£50,270) | £37,700 × 6% = £2,262 |
| Class 4 NICs (2% on £50,270–£100,000) | £49,730 × 2% = £995 |
| Total tax | £30,858 |
| Take-home | £69,142 (69.1%) |
💡 Set aside: ~£2,572/month. Seriously consider pension contributions, incorporation, or both. Professional tax advice will likely save you multiples of its cost.
| 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 NICs | £3.45/week | If profits above £12,570 |
| Class 4 NICs (lower) | 6% | £12,570 – £50,270 |
| Class 4 NICs (upper) | 2% | Above £50,270 |
Many freelancers underclaim. Common missed expenses include:
Pension contributions reduce your taxable profit pound for pound. If you earn £55,000 and contribute £5,000 to a pension, you're taxed as if you earned £50,000 — saving you £2,000 in Income Tax alone.
If you use the cash basis, you can influence which tax year income and expenses fall into. Buying equipment before April 5 reduces this year's profit; delaying invoicing until after April 6 pushes income into next year.
At profits above £40-50k, operating through a limited company and paying yourself a salary plus dividends can reduce your overall tax bill. The savings depend on your specific situation — get professional advice.
The Getting-Paid Toolkit includes expense tracking templates, payment chasing sequences, and compliance checklists to keep your freelance finances organised year-round.
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