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UK Income tax calculator

Quickly calculate how much tax you need to pay on your income.
Annual self-employment income
£
Self-employment expenses
£
Select tax year
Income after tax
£37,986
Income tax
£7,300
NI
£3,714
Total income tax
£7,300
£12,500 taxed at 0%
£36,500 taxed at 20% : £7,300
Total NI contributions
£3,714
Class 2 NI: £159
Class 4 NI at 9% : £3,555
What you’re left with
£37,986

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How your income tax is calculated

As a self-employed you have to pay your income tax and national insurance contributions yourself during your annual self assessment. Our calculator helps you quickly assess how much payment is due.

However you may be eligible for a tax refund when:

  1. You already made tax payments for the year but your annual income ended up smaller than planned
  2. You have done things that qualify for tax relief (made private pension contributions, give to charity, etc)

In your case when you earn £49,000:

Income tax breakdown

You pay no income tax on first £12,500 that you make

You pay £7,300 at basic income tax rate (20%) on the next £36,500

What is Income Tax?

Before using our UK Income Tax calculator, it would probably help to know what the heck Income Tax is. Income Tax is basically a charge that we all pay on our earnings in the UK. You have to pay it when you earn more than £12,570 in the 2021/22 tax year. This earnings threshold is known as the Personal Allowance. It’s a tax-free allowance that we’re all entitled to unless you earn more than £100,000. If you earn more than this, HMRC class you as a high earner and you lose your entitlement to the allowance for each £1 you earn over £100,000.

How is the tax calculated?

What you owe in Income Tax is calculated based on how much you earn. The Income Tax rates are set by the government. If they change, this usually happens in the Spring or Autumn Budget. In the current 2021/22 tax year, the rates are in the table 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

The income thresholds were recently changed by the government, but the tax rates remain the same. It’s important to remember when calculating your taxes that the rates only apply to a portion of your income and not the whole amount. For example, if you earn £60,00 a year, you’re not taxed 40% of this full amount. It breaks down like this:

  • £12,570 = tax-free
  • £37,700 = 20%
  • £9,730 = 40%

You can see the exact breakdown above when you use the calculator.

What about expenses?

When you’re self-employed, you can deduct your business spending from your overall yearly earnings so that you’re only paying tax on your profits. This business spending is known as your expenses.

In order to deduct expenses, it’s important to keep a record of what you spend, on what, and when. Take a look at our guide on why it’s important to keep receipts below if you want to read more. To use the TaxScouts service, we don’t need to see your receipts but we will need to see your records (whether in a spreadsheet or downloaded from accounting software you use).

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