Wondering what taxes self-employed people have to pay? Just like employees, self-employed people have to pay income tax and National Insurance contributions.
The only difference is that they’re not collected automatically through PAYE. Basically, instead of an employer doing it for you, you have to calculate them yourself then file a Self Assessment tax return.
First of all, (just in case you’re not quite sure) a personal allowance is the amount of money you can earn without having to pay Income Tax or, as of April 2024, National Insurance.
Check out the table below for the latest income tax rates.
The income tax rates in the 2025/26 tax year 👇
| Income | Tax rate | Tax band |
| 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 |
Go you! If you have two or more jobs, a combination of being an employee and self-employed, make sure that your personal allowance is applied to the one where you make the most money.
On your tax code, here are the letters to look out for.
To make changes to this, you should get in touch with HMRC directly.
This is where it gets a little tricky, so listen up! 🔊
Self-employed people pay Income Tax on profits only. This is different to employees who pay Income Tax on total income.
To calculate your profit, deduct your claimable expenses from your self-employed income (if you have any). Or, if maths isn’t something you want to be involved with, use our tax calculator instead.
As an employee, your employer calculates and deducts Income Tax and National Insurance contributions for you.
But because you’ve earned over £1,000 from self-employment, you need to submit a Self Assessment tax return to pay Income Tax and National Insurance on your earnings.
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 £12,570 that you make.
You pay£2,194 (8%) on your salary between £12,570 and £27,430
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 £3,785 – you should see these on your payslip.
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 also have to pay £616 (6%) on £10,270 of your self-employment income.
You will have to pay an additional £355 (2%) on another £17,730 of your self-employment income.
You need to save
to pay your £10,116.80 tax bill by 31/1/2026 which is in 666 days
If you’re self-employed and your profits are above the personal allowance, you have to pay National Insurance with the following rates.
National Insurance rates in the 2025/26 tax year 👇
| NI class | Who pays? | How much? |
| Class 1 | Employees earning over £12,570 | 8% on earnings between £242 and £967 per week
2% if you earn £967+ per week |
| Class 1A/1B | Employers | 15% |
| Class 3 | Voluntary contributions | £17.75 per week |
| Class 4 | Self-employed earning over £12,570 | 6% on profits between £12,570-£50,270
2% on profits over £50,270 |
If you’re self-employed but do not generate enough profit to make compulsory National Insurance contributions, you can make voluntary contributions.
You may be wondering, why would anyone volunteer to pay tax? 😅
In fact, making voluntary contributions is not only quite common but it’s very helpful in the long run. It means no matter what and how you’re earning, you can contribute to your state pension entitlement.
If you want to check how much you’re currently entitled to, you can do this here.
Here are the dates to keep in your diary.
Key dates in the current 2025/26 tax year 👇
| Deadline | Date | Year |
| Tax year starts | 6th April | 2025 |
| Tax year ends | 5th April | 2026 |
| Register for self assessment | 5th October | 2026 |
| Pay tax bill by PAYE salary | 30th December | 2026 |
| Self assessment deadline | 31st January | 2027 |
If you choose to pay your tax bill through Self Assessment, here are some of the ways to pay NIC:
If you want to know more how to pay National Insurance contributions if you’re self-employed, check out our detailed guide here.
Whether you need a hand sorting your Self Assessment tax return or simply need tax advice, our accredited accountants are more than happy to help!
Learn about our tax services here.
Manage your self-employed finances in one place with 10/10 bookkeeping tools.
Or see our Guides, Calculators or Taxopedia
