How much tax and National Insurance do I pay on £62,000 self-employed profit?

Full answer

For a self-employed sole trader with £62,000 of taxable profit in 2026/27, Income Tax is calculated the same way as for an employee: the first £12,570 is covered by the Personal Allowance, and the rest is taxed at 20% basic rate up to £50,270 of profit, then 40% above that. Because profit exceeds the £50,270 Upper Profits Limit, part of it is taxed at the 40% higher rate and Class 4 National Insurance drops to 2% on the slice above that limit. This gives total Income Tax of £12,232. Class 4 National Insurance, which self-employed people pay instead of the Class 1 employee National Insurance that applies to salaries, is charged at 6% on profits between the £12,570 Lower Profits Limit and the £50,270 Upper Profits Limit, and 2% above that limit, giving total Class 4 National Insurance of £2,496.60. Class 2 National Insurance no longer applies as a separate weekly charge for most self-employed people, having been abolished from April 2024, though those with profits below the £7,105 Small Profits Threshold can pay voluntary Class 2 contributions at £3.65 a week to protect their State Pension record. Total deductions leave the self-employed person with £47,271.40 after tax and National Insurance. Unlike employees, self-employed people must also budget for Payments on Account -- advance payments toward the following year's tax bill, each equal to half of the current year's Self Assessment liability, due by 31 January and 31 July -- which can create a larger-than-expected combined bill in the second year of trading.

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