How Much to Save for Tax Calculator
Self-employed: see exactly what to set aside per invoice & per month for 2026/27
Last updated: June 2026
Tax Pot Calculator for the Self-Employed
Enter your expected annual profit and we'll tell you what percentage to set aside, how much to skim from each invoice, and how much to move to your tax pot each month.
How much should you save for tax when self-employed?
If you're a sole trader or freelancer in the UK, no one deducts tax from your invoices — that's your job. Get it wrong and the 31 January Self Assessment deadline becomes a nasty surprise. The old rule of thumb is “put aside 20-30%”, but the right figure depends entirely on your profit level, whether you also have a PAYE job, and whether this is your first year (when payments on account roughly add 50% to your bill).
This calculator replaces the guesswork. Enter your expected annual profit and it works out your real combined liability — Income Tax plus Class 4 National Insurance — for the 2026/27 tax year, then turns it into three numbers you can actually act on: the percentage to skim from every invoice, the pounds to set aside per £100 billed, and a monthly transfer to your dedicated tax-pot savings account. It's built for sole traders, freelancers, contractors, gig-economy workers and anyone filing Self Assessment who wants to stop being caught short in January.
How it works
The calculator applies the verified 2026/27 figures for England:
- Personal Allowance: £12,570 tax-free (tapered by £1 for every £2 of income over £100,000).
- Income Tax: 20% on income from £12,571 to £50,270, 40% from £50,271 to £125,140, and 45% above £125,140.
- Class 4 National Insurance: 6% on profits between £12,570 and £50,270, then 2% on profits above £50,270.
- Class 2 National Insurance: £3.65 per week — treated as paid (no charge) once profits reach the £7,105 Small Profits Threshold.
- Payments on account: two instalments, each 50% of your prior-year Income Tax + Class 4 bill, due 31 January and 31 July.
If you enter a PAYE salary, the calculator allocates your Personal Allowance to that income first so it only sets aside tax on the profit that isn't already taxed at source. In your first year, it adds the first payment on account to the January total so you can see the full “~150%” cash demand coming.
Worked example
Say you expect £40,000 profit with no other income in 2026/27:
- Income Tax: (£40,000 − £12,570) × 20% = £5,486
- Class 4 NI: (£40,000 − £12,570) × 6% = £1,646
- Total Self Assessment bill: £7,132
That's 17.8% of profit — so set aside about £18 from every £100 you bill, or transfer roughly £594 a month to your tax pot. In your first year, the 31 January payment would be £7,132 plus a £3,566 payment on account = £10,698, with a further £3,566 due 31 July.
Frequently asked questions
Is saving 20-30% for tax enough?
For most basic-rate sole traders the true figure is around 18-22% of profit (Income Tax plus Class 4 NI), so 25-30% gives a comfortable buffer. But higher earners crossing £50,270 face 40% Income Tax, and first-year traders need extra for payments on account — this calculator gives you your exact number instead of a guess.
What are payments on account and why is my first bill so big?
Payments on account are advance instalments towards next year's tax, each equal to 50% of this year's Income Tax and Class 4 bill, due 31 January and 31 July. In your first year you pay the full bill plus the first 50% instalment on the same 31 January date — roughly 150% of your bill in one go.
Do I pay National Insurance as well as Income Tax?
Yes. Self-employed people pay Class 4 NI at 6% on profits between £12,570 and £50,270 and 2% above that. Class 2 NI (£3.65/week) is treated as paid once your profits reach the £7,105 Small Profits Threshold, so there's usually no extra Class 2 charge. This calculator includes Class 4 in your set-aside figure.
What if I also have a PAYE job?
Enter your PAYE income in the optional box. Your Personal Allowance is used against that salary first, so the calculator only sets aside tax on your self-employed profit at the correct marginal rate — which may be 40% if your combined income pushes you into the higher-rate band.
Source: figures verified against GOV.UK — Self-employed National Insurance rates, Income Tax rates and allowances and payments on account (2026/27).
Related tools: Self-Employed Tax Calculator, Salary Calculator, VAT Calculator, Pension Pot Calculator and the full list of UK calculators.