There is no such thing as "the self-employed tax rate". There are two separate taxes on your profit, charged at different rates on different thresholds, and a payment schedule that catches almost everyone out in their first year. Here is the whole picture for 2026/27.
This is the bit that trips people up. Your Self Assessment bill is income tax plus Class 4 National Insurance, both charged on your profit (what you invoiced minus allowable expenses), not on your turnover.
| Profit | Income tax | Class 4 NI | Combined |
|---|---|---|---|
| Up to £12,570 | 0% | 0% | 0% |
| £12,571 to £50,270 | 20% | 6% | 26% |
| £50,271 to £125,140 | 40% | 2% | 42% |
| Over £125,140 | 45% | 2% | 47% |
Those combined figures are the number that actually matters. Every extra £100 of profit in the basic-rate band costs you £26, not £20. Notice too that National Insurance drops from 6% to 2% exactly where income tax jumps from 20% to 40%, which softens the higher-rate cliff a little.
Rates are abstract. Here is the money, for England, Wales and Northern Ireland in 2026/27.
| Profit | Income tax | Class 4 NI | Total | You keep | Effective rate |
|---|---|---|---|---|---|
| £20,000 | £1,486 | £446 | £1,932 | £18,068 | 9.7% |
| £30,000 | £3,486 | £1,046 | £4,532 | £25,468 | 15.1% |
| £35,000 | £4,486 | £1,346 | £5,832 | £29,168 | 16.7% |
| £50,000 | £7,486 | £2,246 | £9,732 | £40,268 | 19.5% |
| £60,000 | £11,432 | £2,457 | £13,889 | £46,111 | 23.1% |
| £80,000 | £19,432 | £2,857 | £22,289 | £57,711 | 27.9% |
The effective rate is always well below the headline rate, because the first £12,570 is tax-free and the 20% band is wide. Someone on £80,000 of profit is a "40% taxpayer" who actually hands over 27.9%.
Class 2 used to be a flat weekly charge on top. Since April 2024 it is not, and a lot of older articles have not caught up.
For 2026/27, if your profit is at or above the Small Profits Threshold of £7,105, Class 2 is treated as paid. You pay nothing and still get a qualifying year towards your State Pension.
If your profit is below £7,105, nothing is charged automatically, but you can choose to pay Class 2 voluntarily at £3.65 a week (about £190 a year) to keep that year on your National Insurance record. For anyone building towards the 35 qualifying years for a full State Pension, that is usually one of the cheapest years you can buy.
Here is the one that causes genuine cashflow trouble. If your Self Assessment bill is over £1,000, HMRC does not just collect it. It also asks you to prepay towards next year, in two instalments of half your bill each, due 31 January and 31 July.
In your first year that lands all at once. Take the £35,000 profit from the table:
| Date | What it is | Amount |
|---|---|---|
| 31 January | Your bill | £5,832 |
| 31 January | First payment on account | £2,916 |
| 31 January | Total due that day | £8,748 |
| 31 July | Second payment on account | £2,916 |
Read that again: a £5,832 tax bill means writing an £8,748 cheque in January. That is 150% of the number you were budgeting for, and it is the single most common reason a first-year sole trader gets caught short.
It evens out after year one, because from then on the payments on account you have already made are deducted from each new bill. You are exempt if more than 80% of last year's tax was already deducted at source, for example through PAYE on a job you hold alongside the self-employment.
Free calculatorPut in your profit and see income tax, Class 4 NI, your payments on account and what you actually keep, with a Scotland option.
Open the self-employed tax calculator →If you live in Scotland, the income tax half of the bill uses six bands rather than three for 2026/27.
| Band | Taxable income | Rate |
|---|---|---|
| Starter | £12,571 to £16,537 | 19% |
| Basic | £16,538 to £29,526 | 20% |
| Intermediate | £29,527 to £43,662 | 21% |
| Higher | £43,663 to £75,000 | 42% |
| Advanced | £75,001 to £125,140 | 45% |
| Top | Over £125,140 | 48% |
The number that bites is £43,663. That is where the 42% rate starts in Scotland, against £50,271 for the 40% rate elsewhere, so a Scottish sole trader hits the higher rate on roughly £6,600 more of their profit. National Insurance is set UK-wide, so Class 4 is 6% and 2% on the same thresholds wherever you live.
If your gross trading income for the year is £1,000 or less, the trading allowance covers it and you may not need to register for Self Assessment at all. That is turnover, not profit, and it is per person rather than per side hustle.
Above £1,000 you can either deduct the £1,000 allowance instead of your actual expenses, which is simpler if your costs are low, or claim your real expenses in the normal way. You cannot do both. The allowance does not apply to income from a partnership.
There is no single self-employed tax rate. You pay income tax at the same rates as an employee, 20% then 40% then 45%, plus Class 4 National Insurance at 6% on profit between £12,570 and £50,270 and 2% above that. So the combined marginal rate on profit is 26% in the basic-rate band, 42% in the higher-rate band and 47% at the top.
On £35,000 of profit in 2026/27, outside Scotland, you pay about £4,486 income tax and £1,346 Class 4 National Insurance, a total of £5,832, leaving £29,168. That is an effective rate of 16.7%. On £50,000 of profit the total is £9,732, and on £80,000 it is £22,289.
For most people, no. If your profit is at or above the Small Profits Threshold of £7,105 for 2026/27, Class 2 is treated as paid, so you build up State Pension entitlement without paying anything. If your profit is below £7,105 you can pay Class 2 voluntarily at £3.65 a week to protect your National Insurance record.
The trading allowance means the first £1,000 of gross trading income is tax-free, and below that you may not need to register for Self Assessment at all. Above that, your personal allowance of £12,570 applies, so you generally pay no income tax on profit up to £12,570. Class 4 National Insurance also starts at £12,570.
If your Self Assessment bill is more than £1,000, HMRC asks you to prepay towards next year in two instalments, each half of last year's bill, due 31 January and 31 July. In your first year this means the January payment is 150% of the bill you were expecting. You are exempt if you paid more than 80% of last year's tax outside Self Assessment.
The income tax part is. Scotland has six bands for 2026/27: 19%, 20%, 21%, 42%, 45% and 48%, with the 42% rate starting at £43,663, well below the £50,271 higher-rate threshold elsewhere. National Insurance is set UK-wide, so Class 4 stays at 6% and 2% on the same thresholds wherever you live.
Not financial or tax advice. General information on how self-employed tax works for 2026/27. Figures assume a standard tax code, no other income, and no student loan, dividends, Capital Gains Tax or High Income Child Benefit Charge, and are rounded. Your own position may differ, and rates and thresholds change. Sources: gov.uk self-employed National Insurance, income tax rates, Scottish income tax, payments on account, UK tax rates 2026/27.