Pay & Tax

Self-Employment Tax Calculator

Both halves of the contribution, on net profit.

What it does. Self-employment tax is charged on net profit — income after allowable business expenses — not on turnover. The rate is higher than an employee pays because you cover both the employee and employer halves of the contribution, which is the part that surprises people in their first year.

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How to use Self-Employment Tax Calculator

Enter turnover and allowable business expenses.
Set the rate, threshold and any cap, or use a preset.
Read the taxable profit and the estimated contribution.

You pay both halves

An employee's social contribution is split: they pay part, the employer pays part, and only their own half appears on the payslip. Working for yourself, you are both parties.

That is why a self-employed rate looks roughly double an employee rate for what appears to be the same thing.

Part of it is often deductible against income tax, which softens the effect, and this is one of the more common things to miss when estimating a first-year bill.

Profit, not turnover

The charge is on profit after allowable expenses. Getting expenses right is therefore the single biggest lever on the bill, and it is where good records pay for themselves.

Typical allowable costs include equipment, software, professional fees, business travel, a proportion of home costs where you work from home, and training that maintains existing skills.

The boundaries are genuinely tricky — client entertainment is commonly disallowed, commuting to a regular workplace usually is not deductible while travel to a client site often is, and clothing rarely qualifies unless it is protective or a uniform.

Set money aside as you invoice

The structural difficulty of self-employment is that nothing is withheld. The money arrives in full and the bill arrives later, often alongside a payment on account toward the following year.

Moving a fixed percentage of every payment into a separate account as it arrives is the habit that prevents the January problem.

First years are the hardest, because the first bill can include both the year just ended and an advance payment toward the next — effectively a year and a half of tax in one demand.

Frequently asked questions

Is self-employment tax charged on turnover or profit?

On net profit — income after allowable business expenses. Getting expenses recorded properly is the largest single lever on the bill.

Why is self-employment tax higher than what employees pay?

Because you pay both halves of the contribution. An employee pays one part and their employer pays the other, and only the employee half appears on a payslip.

How much should I set aside?

A fixed percentage of every payment as it arrives, moved to a separate account. The exact figure depends on your rates and profit — this tool estimates it — but the habit matters more than the precision.

Why was my first tax bill so large?

First bills often combine the year just ended with an advance payment toward the next, which can amount to roughly a year and a half of tax in one demand.

Can I deduct working from home?

Usually a proportion of household costs, calculated either by a simplified flat rate or by apportioning actual costs by rooms and time used. The rules differ by country and both methods are rarely allowed at once.