Answers · UK 2025/26

How much tax and National Insurance does a self-employed person pay on £22,000 profit?

A self-employed person with £22,000 taxable profit in 2026/27 pays £1,886 Income Tax and £565.80 Class 4 National Insurance, keeping £19,548.20 after tax and NI -- around £780 more than an employee on the same £22,000 gross salary, because there is no employee Class 1 National Insurance to pay.

Last updated: 3 July 2026Last reviewed: 3 July 2026How we verify

Full answer

Self-employed people pay Income Tax on their trading profit (turnover minus allowable business expenses) using exactly the same rates and bands as employees, but National Insurance works differently, since self-employed earners pay Class 4 rather than employee Class 1. On £22,000 taxable profit for 2026/27: after the £12,570 Personal Allowance, £9,430 is taxable, entirely within the 20% basic rate band, giving £1,886 Income Tax -- identical to what an employee would pay on the same figure. Class 4 National Insurance is charged at 6% on profits between the £12,570 Lower Profits Limit and the £50,270 Upper Profits Limit, so 6% of £9,430 is £565.80. Class 2 National Insurance was abolished for most self-employed people from April 2024, though voluntary Class 2 payments remain available for those with profits below the £7,105 Small Profits Threshold to protect State Pension entitlement -- not relevant at £22,000 profit. Total deductions of £2,451.80 leave £19,548.20 after tax and National Insurance, compared with £18,773.60 that an employee on a £22,000 salary would take home after paying 8% employee Class 1 National Insurance instead of the lower 6% Class 4 rate. At this level of profit, many sole traders find the £1,000 trading allowance and simplified cash-basis accounting are sufficient without needing full traditional accruals accounting, keeping compliance costs proportionate to the size of the business.