Sole Trader Tax Calculator (UK)

Enter Calculation

Annual Profit (£)

Tax Year 2024/25

Results

Total Tax & National Insurance

£9,731.8

due for 2024/25 self-assessment

Income Tax	£7,486
Class 2 NIC	£0
Class 4 NIC	£2,245.8
Take-Home Profit	£40,268.2
Effective Tax Rate	19.46%

What this calculator does

This tool is for self-employed sole traders in the United Kingdom. It estimates your Income Tax and National Insurance for the 2024/25 tax year based on your annual taxable profit, and shows your take-home profit and effective tax rate. It assumes you have no other income and that the standard personal allowance applies.

How to use it

Enter your annual business profit (turnover minus allowable expenses). The calculator deducts your personal allowance, applies the Income Tax bands, and adds Class 4 National Insurance. Class 2 NIC is shown as £0 because, from 2024/25, sole traders with profits above the Small Profits Threshold are treated as having paid it without an actual charge.

The formula explained

Income Tax is charged on profit above the £12,570 personal allowance: 20% on the first £37,700 of taxable income, 40% up to £125,140, and 45% above. The personal allowance tapers away by £1 for every £2 of profit over £100,000. Class 4 NIC is charged at 6% between £12,570 and £50,270, then 2% on profit above £50,270.

$$\begin{gathered} \text{Total Tax} = \text{Income Tax} + \text{Class 4 NIC} \\[1.5em] \text{where}\quad \left\{ \begin{aligned} \text{PA} &= 12{,}570 - \max\!\left(0,\ \tfrac{\text{Profit}-100{,}000}{2}\right) \\ T &= \max(0,\ \text{Profit} - \text{PA}) \\ \text{Income Tax} &= 0.20\,T_{\le 37{,}700} + 0.40\,T_{\le 112{,}300} + 0.45\,T_{>} \\ \text{Class 4} &= 0.06\,(P_{\le 50{,}270}\!-\!12{,}570) + 0.02\,(P\!-\!50{,}270) \end{aligned} \right. \end{gathered}$$

Total deductions combine Income Tax with Class 2 and Class 4 National Insurance.

Income Tax is charged in bands as profit rises through each threshold.

Worked example

On £60,000 profit: taxable income is £47,430. Income Tax = \(£37{,}700 \times 20\% + £9{,}730 \times 40\% = £7{,}540 + £3{,}892 = £11{,}432\). Class 4 NIC:

$$\text{Class 4 NIC} = (£50{,}270 - £12{,}570) \times 6\% + (£60{,}000 - £50{,}270) \times 2\% = £2{,}262 + £194.60 = £2{,}456.60$$

Total = \(£13{,}888.60\).

FAQ

Does this include the trading allowance? No — enter profit after expenses; the £1,000 trading allowance is not applied automatically.

Is Class 2 NIC really zero? For 2024/25, profits above the Small Profits Threshold mean no Class 2 charge but contributions are still credited.

Is this an official figure? It is an estimate. Use HMRC self-assessment or an accountant for your final return.