Tax and NI
How much tax to put aside when self-employed
Nobody deducts tax from your invoices, so the only safe habit is to move a fixed share of each payment into a separate account as it arrives.
A self-employed person in England, Wales or Northern Ireland with £30,000 of profit in 2026/27 should put aside 15.1 % of the profit, £4,532 for the year, to cover Income Tax and Class 4 National Insurance. At £60,000 of profit the share rises to 23.1 %, because part of it falls in the 40 % band. The share depends on profit, not on turnover: apply it to what is left of an invoice after the costs of earning it, or to the whole invoice if your costs are small and you prefer to over-save. Student loan repayments, if you have one, come on top and are not covered by these figures. In your first year of trading the cash needed in January is larger than the bill itself, since HMRC usually adds a first payment on account of half the bill, due on 31 January together with the balance. Enter your expected profit, any salary and loan plan in the calculator for your own share.
How much to put aside from each invoice
Put aside
18.7 %
| Self Assessment bill | £8,432 |
| A month, over 12 months | £703 |
| On a £1,000 invoice (profit) | £187 |
Figures checked by Radif Partners · Editorial policy · How we calculate
Shares of profit for 2026/27
The table gives the share of profit to set aside at six levels, worked out by the same engine as the calculator, with no salary and no student loan. The last two columns turn the English figure into a monthly transfer and into the cash needed on the first January of a new business.
| Profit | Put aside, rUK | Put aside, Scotland | A month (rUK) | First January (rUK) |
|---|---|---|---|---|
| £15,000 | 4.2 % | 4.1 % | £53 | £632 |
| £25,000 | 12.9 % | 12.8 % | £269 | £4,848 |
| £35,000 | 16.7 % | 16.7 % | £486 | £8,748 |
| £45,000 | 18.7 % | 19.6 % | £703 | £12,648 |
| £60,000 | 23.1 % | 26.1 % | £1,157 | £20,833 |
| £80,000 | 27.9 % | 30.7 % | £1,857 | £33,433 |
Two figures matter for planning. The average share above covers the whole year. The marginal share is what each new pound costs: 26 % at £30,000 of profit and 42 % at £60,000 in England, Wales or Northern Ireland. If a good month pushes your profit up, the extra money needs the marginal share set aside, not the average.
Profit, not the invoice
Tax is charged on profit, so the share applies to what is left once the costs of a job are paid. A decorator who invoices £1,000 and spends £250 on paint and materials sets aside 16.7 % of £750 if their yearly profit is around £35,000, not of the full thousand. Applying the share to the gross invoice is simpler and errs on the safe side; the surplus becomes a cushion for the following year. The calculator also shows the amount per £1,000 of profit.
Why the first year needs more
A new sole trader pays nothing for up to twenty-two months after starting, then meets a double demand. For 2026/27, the bill and the first payment on account are both due on 31 January 2028, and a second advance follows on 31 July 2028 (GOV.UK, payments on account). Payments on account are only set when the bill reaches £1,000, so very small profits escape them. If your profit falls the next year, you can ask HMRC to reduce the advances; if it rises, a balancing payment appears the following January.
Things that change the share
A salary from a job raises the share on the side profit, because the job has already used the allowance and part of the basic band; the job plus self-employment page works it through. A student loan adds 9 % of income above the plan threshold (GOV.UK, student loan repayments), and that sum is paid in full each January, outside the payments on account. Pension contributions and genuine business expenses bring the share down. Living in Scotland raises it from the mid-thirties of profit upwards, since the Scottish higher rate of 42 % starts at £43,663.
Open a separate savings account used only for tax. Each time a client pays, move the share shown by the calculator the same day. Check the total against the calculator each quarter with your actual profit so far, and top up or ease off. By the 31 January deadline (GOV.UK, deadlines) the money is already there.