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Employed and self-employed tax calculator

Quickly calculate how much Income Tax and National Insurance you owe on your earnings if you're both employed and self-employed.

Your situation

Outlined number oneOutlined number one
Annual salary (gross)
Self-employed income
Self-employed expenses
?

Tax and profit

Outlined number two
  • Total earnings
    £70,000
    £9,138 already sorted by your employer
    £2,000 self-employment expenses
  • Tax to pay
    £9,722
    Incl. £9,146 income tax
    Incl. £159 class 2 National Insurance
    Incl. £418 class 4 National Insurance
  • What you’re left with
    £49,140

How your taxes are calculated if you’re both employed and self-employed

As a PAYE your employer will calculate and deduct both Income Tax and National Insurance contributions for you.

Because you’ve earned over £1,000 from self-employment, you need to submit a Self Assessment tax return and pay Income Tax and National Insurance on this income.

PAYE taxes breakdown

These are all deducted from your salary by your employer every month.

You pay no Income Tax on the first £12,570 that you make.
You pay £5,486 (20%) on your salary between £12,570 and £40,000.

You pay no NI contributions on the first £9,568 that you make.

You pay£3,652 (12%) on your salary between £9,568 and £30,432

That’s not all. Your employer is also required to pay separate NI contributions, but these won’t come out of your wages. In your case they would need to pay an extra £4,200 – you should see these on your payslip.

Self-Employment tax breakdown

You will need to submit a Self Assessment tax return and pay these taxes and contributions yourself. The deadline is January 31st of the following year.

You pay £2,054 (20%) on your self-employment income between £0 and £10,270.

You pay £7,092 (40%) on your self-employment income between £10,270 and £28,000.

You will need to pay Class 2 NI worth £159.

You will also have to pay £63 (9%) on £702 of your self-employment income.

You will have to pay an additional £355 (2%) on another £17,730 of your self-employment income.

What does it mean to be employed and self-employed?

When it comes to tax, your employment status is important. When you’re employed i.e. you work for a company on a permanent basis, you’re taxed on a system known as Pay As You Earn (PAYE). This means that the Income Tax and National Insurance you owe is deducted from your wages by your employer before you’re paid. When you’re self-employed, the system is different. You don’t have an employer to deduct the taxes you owe automatically so the onus is on you to sort it yourself. You declare your untaxed income and pay tax via a tax return. 

But where does that leave those who are employed and have freelance commitments on the side, or even their own side business? Through the eyes of HMRC, these people are seen as being both employed and self-employed. Put simply, you’re taxed both automatically, and manually via a tax return. 

Do I pay more tax if I have a side hustle?

Not exactly. Take a look at our blog about the tax implications of side hustles to learn more about it. 

Essentially, having a side hustle won’t affect the way you’re taxed as such. You won’t be taxed at a higher rate. Similar to earning money from rental income outside your employment, all of your earnings are added together at the end of the tax year. You’re taxed at a rate that’s based on the total amount. Take a look at the current tax rates below:

Income Tax rate
Up to £12,570 0% Personal allowance
£12,571 to £50,270 20% Basic rate
£50,271 to £150,000 40% Higher rate
over £150,000 45% Additional rate

How to use the employed and self-employed tax calculator

It couldn’t be more simple. Just input your gross salary (what you’re paid before tax is deducted) and the money you make from your side hustle. Anything that you’ve spent on your business, for example buying a table to use as a stall at a market, you deduct from your overall earnings. This means you’re only taxed on your profits. These spends are known as expenses. Add any expenses to the box, “Self-employment expenses”.

Be aware that if your expenses are less than £1,000 in the tax year, we’ll automatically deduct the Trading Allowance instead in your calculations. This is an allowance that means the first £1,000 of your self-employed income is tax-free. Check out the articles below to read more about the trading allowance.

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