Sole traders & freelancers

How much tax should I put aside?

Q: Is it 20%, 25% or 30% of my income?

It depends on how much you make. On £30,000 of profit it is roughly 15% of turnover; on £50,000 it is about 19 to 20%; once you cross into the 40% band it climbs further. Setting aside 30% is a safe over-estimate for many people, but working out the real figure means you are not tying up cash you could be using.

Q: Should I keep my tax money in a savings account?

Yes, a separate savings account is the simplest system. The money is yours until 31 January (and 31 July for the second payment on account), so keeping it somewhere that pays interest means it earns a little while it waits. The key discipline is moving your percentage across the moment you are paid.

The number one worry when you first go self-employed: what slice of every payment do I bank so I'm not caught out in January? Put in your expected profit for 2026/27 and get the exact amount to hold back — as a percentage of every invoice, a monthly figure, and the real first-January bill once payments on account are added in.

Your 2026/27 self-employment

Rough figures are fine — you can update them as the year goes on. Nothing is sent anywhere; this runs entirely in your browser.

Expected turnover everything you'll invoice this tax year, before costs

Business expenses allowable costs you'll claim — leave blank if none

Other taxed income salary or pension already taxed under PAYE — optional

Student loan plan repaid through Self Assessment on your profit

Why "just save 20%" isn't enough

The rule of thumb you'll hear is "put aside 20–30% of everything." It's a fine starting point, but the real figure depends on your profit: below the £12,570 Personal Allowance you owe nothing, while higher profits pull in 40% Income Tax and Class 4 National Insurance on top. The calculator above works out your percentage instead of a guess — so you're not over-saving and starving your business, or under-saving and panicking in January.

The first-January trap

Your first Self Assessment bill is bigger than a year's tax. On 31 January you pay the whole balancing amount plus your first payment on account — 50% of next year's Income Tax and Class 4 upfront — whenever that liability is over £1,000. That's why a first bill can feel like 150% of the tax you expected. The result above shows this figure separately so it doesn't ambush you.

A simple system that works

Open a separate savings account just for tax — never mix it with spending money
Every time you're paid, move your percentage across the same day, before you can spend it
Keep the money somewhere it earns interest — it's yours until 31 January, so let it work
Re-run this calculator when your income changes so the percentage stays right
Remember the 31 July second payment on account too — set aside for both dates

More free tools

Full tax bill calculator →Your complete Self Assessment bill for 2026/27, broken down line by line. Payments on account →How the 31 January and 31 July instalments work, and when you can reduce them. Self-employed NI →Exactly how Class 2 and Class 4 National Insurance add to your bill. Side hustle tax →Only just started? Check whether you need to register and the £1,000 allowance.

Common questions

How much tax should I put aside when self-employed?

Enough to cover your Income Tax and Class 4 National Insurance on your profit for the year. As a rough guide that's around 20% of profit at typical sole-trader levels, but it rises as profit grows and falls to nothing below the £12,570 Personal Allowance. The calculator above gives your exact percentage of turnover so you can move that slice into a savings account every time you're paid.

Is it 20%, 25% or 30% of my income?

It depends on how much you make. On £30,000 of profit it's roughly 15% of turnover; on £50,000 it's about 19–20%; once you cross into the 40% band it climbs further. "Set aside 30%" is a safe over-estimate for many people, but the tool works out the real figure so you're not tying up cash you could be using.

Why is my first tax bill so much bigger than expected?

Because of payments on account. On your first 31 January you pay the tax for the year just gone and a first payment on account worth 50% of it towards the next year — so the total can be about 150% of one year's tax. It happens whenever your Income Tax plus Class 4 bill is over £1,000. The result above shows this first January figure on its own so you can save for it.

Do I need to set aside for National Insurance too?

Yes. Class 4 National Insurance is collected through the same Self Assessment bill as your Income Tax, so it's already included in the amount to set aside above. If your profits are above the small-profits level you may also pay Class 2 — our National Insurance calculator breaks both down.

Should I keep my tax money in a savings account?

Yes — a separate savings account is the simplest system. The money is yours until 31 January (and 31 July for the second payment on account), so keeping it somewhere that pays interest means it earns a little while it waits. The key discipline is moving your percentage across the moment you're paid, before it feels like spendable income.

Keep the set-aside figure right all year

This page gives you a snapshot. The paid Self Assessment Tax Estimator keeps it live — enter each month's income and expenses in a proper spreadsheet and it updates your bill, your monthly set-aside and your payment-on-account dates as you go, so the number on 31 January is never a surprise.

Self Assessment Tax Estimator 2026/27 — your whole bill, salary plus self-employment, with the monthly set-aside and payment-on-account dates worked out for you.
Freelance Day-Rate & Profit Calculator — work backwards from the take-home you need.
Rental Property ROI & Yield Calculator — for anyone with a buy-to-let alongside.
Invoice Tracker & Log — paid, outstanding and overdue, automatically.

Excel and Google Sheets. Working formulas, not just formatting. Built and checked by us, with AI assistance, and every calculation verified.

Get the Tax Estimator — £9 →

£9 on its own, or all four tools for £19, with a 14-day money-back guarantee.