Answers · UK 2025/26

How much tax and National Insurance does a self-employed person pay on £38,000 profit?

A self-employed person with £38,000 taxable profit in 2026/27 pays £5,086 Income Tax and £1,525.80 Class 4 National Insurance, keeping £31,388.20 after tax and NI -- around £1,240 more than an employee on the same £38,000 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

On £38,000 taxable profit for 2026/27, Income Tax follows the same rates and bands as for an employee: taxable income after the £12,570 Personal Allowance is £25,430, entirely within the 20% basic rate band, giving £5,086 Income Tax. 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 £25,430 is £1,525.80. Class 2 National Insurance was abolished for most self-employed people from April 2024. Combined deductions of £6,611.80 leave £31,388.20 after tax and National Insurance. An employee on a £38,000 salary pays the same £5,086 Income Tax but £2,034.40 employee Class 1 National Insurance (8% of the same £25,430), keeping £30,879.60 -- so the self-employed person keeps about £508.60 more, reflecting the lower Class 4 rate compared with employee Class 1 National Insurance. Self-employed higher earners should remember they do not benefit from an employer pension contribution or statutory benefits such as Statutory Sick Pay, so the National Insurance saving compared with employment is partly offset by needing to fund your own pension and any income protection insurance separately, and by not having an employer contribute additional secondary Class 1 National Insurance on your behalf, which is a cost employers bear but which does not directly reduce an employee's own take-home pay.