Calculate your UK income tax, National Insurance, and take-home pay as a self-employed freelancer for 2024/25.
Estimated take-home
£32,868
per year — £2,739/mo — £632/wk
Effective rate
17.8%
Set aside 18% of invoices
Estimates only. Based on 2024/25 UK rates. Does not account for pension contributions, marriage allowance, or other reliefs. Consult a qualified accountant for advice.
The personal allowance (income you pay no tax on) is £12,570. The basic rate band runs from £12,571 to £50,270, taxed at 20%. The higher rate runs from £50,271 to £125,140, taxed at 40%. Income above £125,140 is taxed at 45%.
From April 2024, Class 2 NICs were abolished. Self-employed people now only pay Class 4 NICs: 6% on profits between £12,570 and £50,270, and 2% on profits above that. This is a significant saving over the old Class 2 system.
A common rule of thumb is to set aside 30% of every invoice for tax and National Insurance. This is a safe buffer for most basic-rate taxpayers. If your income regularly exceeds £50,000, increase this to 35–40%.
You only pay tax on your profit, not your revenue. Allowable expenses — such as equipment, software, home office costs, professional subscriptions, and travel — reduce your taxable profit. Keep receipts for everything.
HMRC requires most self-employed people to make two advance payments toward next year's tax bill (in January and July), each equal to half the previous year's bill. This catches many freelancers off guard in their second year.
If you have a student loan, repayments are collected through the Self Assessment process. Plan 1 applies above £24,990 (9%), Plan 2 above £27,295 (9%), and Plan 4 (Scottish) above £31,395. These are deducted on top of income tax and NICs.
Enter your freelance income and any allowable expenses to see your estimated UK income tax, National Insurance, and take-home pay for the 2024/25 tax year.
£40,000 income, £5,000 expenses
Approx. £6,886 tax + £1,629 NICs = £31,485 take-home
£80,000 income, £10,000 expenses
Approx. £21,432 tax + £2,794 NICs = £45,774 take-home
The UK Self Assessment deadline is 31 January for online returns. Miss it and you get an automatic £100 penalty — even if you owe no tax.
As a self-employed person in the UK you pay Income Tax and Class 4 National Insurance Contributions (NICs) on your profits. Income tax uses the same bands as employed workers: 0% on the first £12,570 (personal allowance), 20% on profits from £12,571 to £50,270, 40% on profits from £50,271 to £125,140, and 45% above that. Class 4 NICs are 6% on profits between £12,570 and £50,270, and 2% above that.
Taxable profit is your total income (all invoices you have raised) minus your allowable business expenses. Allowable expenses include items used wholly for business: equipment, software subscriptions, professional fees, home office costs (a proportion of bills if working from home), travel for work, and business insurance. You do not pay tax on expenses — only on what is left after deducting them.
Self Assessment is the system HMRC uses to collect tax from people whose income is not taxed automatically through PAYE. If you are self-employed with profits above £1,000 you must register for Self Assessment, file a tax return each year (deadline: 31 January for online submissions), and pay any tax owed by the same date. You must also make a second payment on account by 31 July.
Payments on account are advance payments towards your next year's tax bill. HMRC requires you to pay two instalments — each equal to half your previous year's bill — in January and July. For example, if your first Self Assessment bill is £4,000 due in January, you will also owe an additional £2,000 payment on account the same day (half of £4,000), making your total January payment £6,000. This surprises many new freelancers.
A common rule of thumb is to set aside 25–30% of every invoice as soon as it is paid. This covers income tax and Class 4 NICs for most basic-rate taxpayers. If your income regularly exceeds £50,000, increase this to 35–40% to account for the higher rate band. Keeping a separate savings account for tax money and treating it as unspendable is the simplest way to avoid a nasty surprise in January.