Making Tax Digital·5 min read·Updated 2026-06-29

How much tax and National Insurance do I pay if I'm self-employed in 2026?

How much tax and National Insurance you pay as a sole trader in 2026: income tax bands, Class 4 and Class 2 NIC, with worked examples at £30k and £60k profit.

Quick answer: As a sole trader you pay income tax and Class 4 National Insurance on your profits. On £30,000 profit that is about £3,486 income tax + £1,045.80 Class 4 NIC. On £60,000 profit it is about £11,432 income tax + £2,456.60 Class 4 NIC. Class 2 NIC is effectively £0 once your profits clear the Small Profits Threshold. Work out your own figure with the self-employed tax calculator.

If you work for yourself, your tax bill is built from three pieces: income tax, Class 4 National Insurance, and Class 2 National Insurance status. The first two are what you actually pay; the third is mostly about protecting your State Pension. This guide explains each, with worked examples, using 2026/27 figures (which are identical to 2025/26 for England, Wales and Northern Ireland).

You're taxed on profit, not turnover

The single most important point: you pay tax on your profit, not your total income. Profit is your business income minus your allowable expenses. So if you turned over £45,000 and had £15,000 of legitimate expenses, your profit — and the figure your tax is based on — is £30,000.

Keeping clean records of income and expenses is exactly what Making Tax Digital is designed to encourage, and it directly reduces the figure you are taxed on.

Income tax bands for 2026/27

For England, Wales and Northern Ireland, the income tax bands for 2026/27 are the same as 2025/26:

Band	Taxable income	Rate
Personal Allowance	Up to £12,570	0%
Basic rate	£12,571 – £50,270	20%
Higher rate	£50,271 – £125,140	40%
Additional rate	Above £125,140	45%

Your Personal Allowance of £12,570 is the slice you can earn before any income tax is due. One thing to watch at higher incomes: the Personal Allowance tapers by £1 for every £2 you earn over £100,000, disappearing entirely at £125,140. For most sole traders that won't apply, but it is worth knowing if you have a strong year.

National Insurance: Class 4 and Class 2

Self-employed National Insurance comes in two classes.

Class 4 NIC is the one you actually pay, and it works like income tax bands:

6% on profits between £12,570 and £50,270.
2% on profits above £50,270.

Class 2 NIC is different. Since the 2024 reform, if your profits are above the Small Profits Threshold (£6,845 in 2025/26, rising to £7,105 in 2026/27), Class 2 is effectively £0 — your National Insurance record is treated as paid without you handing over any money. It still counts towards your State Pension and contributory benefits.

If your profits are below the Small Profits Threshold, Class 2 becomes voluntary — £3.50 a week in 2025/26 and £3.65 a week in 2026/27 — which you may choose to pay to protect your State Pension entitlement. For a deeper dive, see Class 2 and Class 4 National Insurance explained.

Worked example: £30,000 profit

Let's run the numbers for a sole trader with £30,000 profit in 2026/27.

Income tax:

First £12,570 covered by the Personal Allowance → £0.
Remaining £17,430 taxed at 20% → £3,486.

Class 4 NIC:

6% on profit between £12,570 and £30,000 (£17,430) → £1,045.80.

Class 2 NIC: profit is above the Small Profits Threshold, so this is treated as paid — £0 to pay.

Total: £3,486 + £1,045.80 = £4,531.80.

Worked example: £60,000 profit

Now a sole trader with £60,000 profit in 2026/27, which crosses into the higher-rate band.

Income tax:

First £12,570 at 0% → £0.
£12,571 to £50,270 (£37,700) at 20% → £7,540.
£50,271 to £60,000 (£9,730) at 40% → £3,892.
Total income tax → £11,432.

Class 4 NIC:

6% on profit from £12,570 to £50,270 (£37,700) → £2,262.
2% on profit from £50,270 to £60,000 (£9,730) → £194.60.
Total Class 4 → £2,456.60.

Class 2 NIC: above the Small Profits Threshold, so treated as paid — £0.

Total: £11,432 + £2,456.60 = £13,888.60.

Notice how the higher-rate band and the drop to 2% Class 4 above £50,270 both kick in. Above that point each extra pound of profit is taxed more on income tax (40%) but less on National Insurance (2% instead of 6%).

The self-employed tax calculator does all of this instantly for any profit figure you enter.

When do you pay it?

Your tax and Class 4 NIC are paid through Self Assessment (or, once you are in Making Tax Digital, via your final declaration). The payment dates are unchanged: a balancing payment on 31 January after the tax year, plus payments on account on 31 January and 31 July where they apply. Sending MTD quarterly updates does not change when you pay — see the MTD quarterly deadlines guide.

Frequently asked questions

Do I pay tax on turnover or profit? Profit. You subtract your allowable business expenses from your income, and tax plus Class 4 NIC are calculated on what remains.

How much is National Insurance if I'm self-employed in 2026? Class 4 NIC is 6% on profits between £12,570 and £50,270, then 2% above £50,270. Class 2 NIC is effectively £0 once your profits are above the Small Profits Threshold (£7,105 in 2026/27), as your record is treated as paid.

What's my tax on £30,000 profit? Roughly £3,486 income tax plus £1,045.80 Class 4 NIC — about £4,531.80 in total for 2026/27, with Class 2 treated as paid.

What's my tax on £60,000 profit? Roughly £11,432 income tax plus £2,456.60 Class 4 NIC — about £13,888.60 in total for 2026/27.

Do I still pay Class 2 National Insurance? If your profits are above the Small Profits Threshold, you pay nothing — it is treated as paid. Below the threshold, Class 2 is voluntary (£3.65/week in 2026/27) and you may choose to pay it to protect your State Pension.

Your self-employed bill is income tax plus Class 4 NIC on your profit, with Class 2 usually treated as paid for free. Plug your own profit into the self-employed tax calculator to see your exact figure before your next payment date.

Guidance only, not tax advice. Based on HMRC rules as at June 2026.