Calculator · 2026/27
Self-employed tax calculator
Income tax on your profits, plus Class 4 National Insurance at 6% rather than the employee's 8% — and no employer contribution at all. The same money earned self-employed carries a materially smaller wedge than the same money paid as a salary.
Your result
Worked example: £50,000 of profit
| Self-employed | Employed on the same figure | Difference | |
|---|---|---|---|
| Income tax | £7,486 | £7,486 | the same |
| National Insurance | £2,245.80 Class 4 | £2,994.40 Class 1 | −£748.60 |
| Employer NI | none | £6,750 | −£6,750 |
| You keep | £40,268.20 | £39,519.60 | +£748.60 |
| Total cost of the work | £50,000 | £56,750 | −£6,750 |
Income tax is identical — the same bands apply to profits and to a salary. The whole difference is National Insurance, and most of it is the employer contribution that self-employment simply does not have.
| Class 4 band | Profit in it | Rate | NI |
|---|---|---|---|
| Below the lower profits limit | £12,570 | 0% | £0 |
| Main rate | £37,430 | 6% | £2,245.80 |
Class 2 is treated as paid once profits reach £7,105, so nothing is due for it. Below that it is voluntary at £3.65 a week, and paying it protects your State Pension record.
What this does not include, and it matters here
This is the arithmetic on a stated profit. It is not a substitute for a return, and self-employment has several things a salary does not:
- Profit is income minus allowable expenses, and working out which expenses are allowable is most of the actual work. Put your profit figure in, not your turnover.
- Payments on account. HMRC generally asks for half of next year's expected bill in January and again in July, so the first year of self-employment can demand roughly 150% of one year's tax in a single January. It is the single most common cash-flow shock in self-employment and this calculator does not show it.
- VAT, once turnover crosses the registration threshold, which is separate from all of this.
- No employer pension, no holiday pay, no sick pay. The lower National Insurance is not a free gain — it is partly the price of those.
Where £50,000 sits in the system
Every calculator on this site runs on the same thresholds, and the reason a figure surprises people is almost always that it sits near one of them. This is what is closest to the worked example above — the thresholds that decide what the next pound is worth, rather than what the last one was.
Everything that changes near £50,000 is above it. The nearest is the National Insurance upper earnings limit, at £50,270 — £270 away, which is 0.5% of this salary.
| What changes | At | From here | |
|---|---|---|---|
| National Insurance upper earnings limit | £50,270 | +£270 | ahead |
| Higher rate | £50,271 | +£271 | ahead |
| High Income Child Benefit Charge | £60,000 | +£10,000 | ahead |
Measured against the 2026/27 parameters for England, Wales & Northern Ireland. Distances are on gross pay before any salary sacrifice, because that is the figure every one of these thresholds is tested against.
- £50,270 — Above it your own National Insurance falls from 8% to 2%. That is £270 away, and it is the reason the higher rate stings less at the margin than the headline jump suggests.
- £50,271 — At £271 away this is close enough that a single month's overtime could cross it. Only the pounds above move to the higher rate — nothing you already earn is re-taxed — but the rate on anything extra changes here.
- £60,000 — £10,000 above this, a parent claiming Child Benefit begins paying it back at 1% for every £200 of income — a real marginal rate stacked on tax and National Insurance.
What a ten per cent move would do
A swing of ten per cent either way from £50,000 crosses 2 band changes: at £52,500 the rate on further pay is 42%, and at £55,000 the rate on further pay is 42%, against 28% here. So a rise and a cut of the same size are not mirror images at this salary, and a bonus large enough to move you into the next band is worth proportionally less than the salary it is paid on.
| If pay moved | Gross | Take-home | Change | Next £100 taxed at |
|---|---|---|---|---|
| −10% | £45,000 | £35,919.60 | −£3,600 | 28% |
| −5% | £47,500 | £37,719.60 | −£1,800 | 28% |
| +5% | £52,500 | £41,007.40 | +£1,487.80 | 42% |
| +10% | £55,000 | £42,457.40 | +£2,937.80 | 42% |
And what a pension contribution would buy
There is no threshold within reach below £50,000, so a pension contribution here is not about ducking under anything — it is simply the ordinary trade. Sacrificing £2,500 costs you £1,800 in take-home, because 28% of it was never going to reach you anyway, and puts the full £2,500 into the pot. That is £2,500 of saving for £1,800 of spending power — a ratio of 1.39 to one, and it is the same ratio for every pound until the next band.
Student loans on the same figure
A student loan is not a tax and it is not in any headline rate, but it leaves the same pay packet on the same day — so it belongs in any figure used to make a decision. This is what each plan takes at the worked example above.
Every one of the five repayment thresholds is behind this salary, so whichever plan you are on, you are repaying. Which plan you are on is not a choice, and the difference between them at this salary is £281.55 a year, so it is worth knowing which one your payslip is deducting.
| Plan | Starts at | Repaid a year | A month | Your next £100 |
|---|---|---|---|---|
| Postgraduate Loan | £21,000 | £1,740 | £145 | 34% |
| Plan 5 | £25,000 | £2,250 | £187.50 | 37% |
| Plan 1 | £26,900 | £2,079 | £173.25 | 37% |
| Plan 2 | £29,385 | £1,855.35 | £154.61 | 37% |
| Plan 4 (Scotland) | £33,795 | £1,458.45 | £121.54 | 37% |
A postgraduate loan is repaid alongside an undergraduate one rather than instead of it, so someone with both pays both.
One engine behind all eleven
Every calculator on this site runs the same tax engine, and the engine file your browser downloads is byte-identical to the one that generated these pages — a test asserts it, because two implementations of a tax rule is one too many. So the figures here cannot disagree with the salary tables, the hourly pages or any other calculator: they are the same arithmetic asked a different question. The method page sets out how the bands are discovered rather than typed, and sources lists every parameter with the government page and the date it was read from.
Questions people actually ask
How much tax will I pay on £50,000 self-employed?
£7,486 of income tax and £2,245.80 of Class 4 National Insurance, leaving £40,268.20. An employee on a £50,000 salary keeps £39,519.60 — slightly less, because Class 1 is 8% where Class 4 is 6%.
What is Class 4 National Insurance?
The National Insurance the self-employed pay on profits: 6% between £12,570 and £50,270, then 2% above. It is paid through Self Assessment rather than payroll.
Do I still pay Class 2 National Insurance?
Not as a payment. For 2026/27 Class 2 is treated as having been paid once profits reach £7,105, so your record is protected without contributing. Below that threshold it is voluntary at £3.65 a week, and paying it is usually worth it to keep a qualifying year.
Is it cheaper to be self-employed than employed?
On National Insurance alone, yes — 6% rather than 8%, and no 15% employer contribution. On £50,000 the total charge on the work is £6,750 lower. But that gap is also where an employer pension, holiday pay, sick pay and notice would have come from, so it is a smaller advantage than the raw arithmetic suggests.
What this calculation assumes
- 2026/27 rates for England, Wales & Northern Ireland.
- One employment, paid through payroll, taxed on the standard code with no adjustments carried in.
- Employment income only — no dividends, savings interest, rental or self-employment income.
- No taxable benefits in kind, no company car, no unpaid leave.
- National Insurance category A: the standard case for an employee over 21 and under State Pension age.
- Income Tax is annual, but National Insurance is charged per pay period — a large one-off bonus can pay more NI than this annual view shows.
- No student or postgraduate loan repayment.
- No salary sacrifice and no workplace pension contribution.