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Wondering how to calculate your self-employed teacher tax? Like many self-employed roles, a self-employed teacher can experience vastly different incomes from month to month. Especially for those that teach children and work to an academic timetable. In some cases, if a teacher is employed on a regular business (e.g. a music school), they may pay taxes via Pay As You Earn (PAYE) which is done by an employer.
For the most part though, this isn’t the case. As a self-employed teacher, there are a few things to consider when it comes to tax:
When you go self-employed, you have to declare your earnings to HMRC so that they can calculate how much tax you owe them each tax year. To declare this, you have to do what’s known as a Self Assessment. Make sure that you register for Self Assessment online by 5th October to pay your tax bill for the tax year that has just ended. For example:
You will only have to do a tax return if you earn over a certain amount in each tax year.
A self-employed teacher pays a tax bill made up of Income Tax and National Insurance.
The rate of income tax that you have to pay in the 2023/24 tax year is based on the following table:
|Up to £12,570||0%||Personal allowance|
|£12,571 to £50,270||20%||Basic rate|
|£50,271 to £125,140||40%||Higher rate|
|Over £125,141||45%||Additional rate|
You only have to pay Income Tax when you earn more than £12,570 in a tax year, and National Insurance when you earn more than £6,725. National Insurance is important to stay on top of because it qualifies you for various state-provided benefits.
Self-employed teachers pay both:
As a self-employed teacher, you’re not immediately eligible for Job Seeker’s Allowance – so you may also choose to pay Class 1 National Insurance to qualify.
In case you’re not already aware, self-employed teaches can deduct expenses from their earnings. Anything that you spend on your business can be deducted from your gross earnings each year to lower your tax bill.
You can technically expense anything that you’ve spent on your business so make sure that you’re as organised as possible. Start a spreadsheet as soon as you can with all your income and business spending.
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