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Self-Employment Tax Estimator

Total invoiced or received from clients before expenses

Software, equipment, home office, travel, professional fees

Enter your annual income above to see an estimated tax breakdown.

If you are a freelancer, sole trader, or self-employed professional, this tool estimates how much tax you owe for the year - and how much to set aside each quarter. Enter your annual income from self-employment, deduct your allowable business expenses, and see a full breakdown: self-employment tax, income tax, Class 2 and Class 4 NI (UK), total annual tax, quarterly set-aside, effective tax rate, and take-home pay. Covers both the US and the UK.

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This is an estimate for planning purposes only using 2024/25 (UK) and 2025 (US) rates. US estimates cover federal tax only and exclude state income taxes. UK estimates exclude pension relief, student loan repayments, and other individual deductions. Tax laws change frequently. Consult a qualified tax professional for your actual tax liability.

How to use this tool

  1. 1Select your country: United States or United Kingdom. This controls the tax rates and calculations used.
  2. 2Enter your total annual self-employment income - all revenue received from clients, before any expenses are deducted.
  3. 3Enter your allowable business expenses: software subscriptions, equipment, home office costs, professional development, travel for work, and professional fees. These reduce your taxable profit.
  4. 4US only: select your filing status (single, married filing jointly, or head of household). This affects both the standard deduction and the tax bracket thresholds.
  5. 5Read the estimated annual tax bill, the quarterly amount to set aside, your effective tax rate, and your take-home after tax.
  6. 6Check the breakdown table to see exactly how your tax is split between self-employment tax, income tax, and NI contributions.

Formula used

US: Net profit = gross income minus business expenses. SE tax = net profit * 92.35% * 15.3%. SE tax deduction = SE tax / 2. Taxable income = net profit minus SE deduction minus standard deduction. Federal income tax = progressive 2025 brackets applied to taxable income. Total = SE tax plus federal income tax. UK: Net profit = gross income minus business expenses. Income tax = progressive bands after £12,570 personal allowance (20%, 40%, 45%). Class 2 NI = £3.45/week if profit above £12,570. Class 4 NI = 9% on profit £12,570-£50,270, 2% above. Total = income tax plus Class 2 plus Class 4.

Example

US freelance designer, $85,000 income

Gross income: $85,000. Business expenses: $6,000 (software, equipment, home office). Net profit: $79,000. SE tax: $79,000 * 0.9235 * 0.153 = $11,157. SE deduction: $5,578. Standard deduction (single): $14,600. Taxable income: $58,822. Federal income tax: $8,407. Total tax: $19,564. Quarterly set-aside: $4,891. Effective tax rate: 24.8%. Take-home: $59,436.

UK sole trader consultant, £60,000 income

Gross income: £60,000. Business expenses: £8,000 (home office, travel, software). Net profit: £52,000. Income tax: basic rate 20% on £37,700 = £7,540 + higher rate 40% on £1,730 = £692. Total income tax: £8,232. Class 2 NI: £179. Class 4 NI: 9% on £37,700 = £3,393 + 2% on £1,730 = £35. Total tax: £11,839. Quarterly set-aside: £2,960. Effective rate: 22.8%. Take-home: £40,161.

Common use cases

  • Freelancers setting aside the right amount from each payment to avoid a surprise tax bill at year end
  • Consultants planning quarterly estimated tax payments (US) or payments on account (UK) to avoid penalties
  • New self-employed workers understanding their first-year tax obligation before filing
  • Business owners comparing their take-home as a sole trader versus as a company director paying salary and dividends
  • Freelancers setting their minimum billing rate to ensure a specific take-home after all taxes

Common mistakes

  • Not setting aside any tax during the year and facing a large bill at filing time - the quarterly figure shown is a minimum; set it aside as soon as you get paid
  • Forgetting that US self-employment tax (15.3%) applies on top of income tax - many new freelancers expect to pay only income tax and are surprised by the SE tax
  • Not claiming all allowable expenses - home office, proportion of phone and internet bills, professional subscriptions, and equipment used for work are deductible and can significantly reduce the tax bill
  • Treating gross income as the tax base without deducting expenses - always enter your actual business expenses to get an accurate estimate
  • US: ignoring state income taxes - many US states charge additional income tax of 3-13%, not captured by this federal-only estimate

Frequently asked questions

What is self-employment tax (US)?

Self-employment tax (SE tax) covers Social Security (12.4%) and Medicare (2.9%) contributions - a combined 15.3%. When you are employed, your employer pays half (7.65%) and you pay the other half. When self-employed, you pay both halves yourself. The tax applies to 92.35% of net self-employment profit (a built-in adjustment). Half of the SE tax is deductible, reducing your income tax liability.

What are Class 4 National Insurance contributions (UK)?

Class 4 NI is the self-employed equivalent of employee NI. It is charged at 9% on profits between £12,570 and £50,270, and 2% on profits above £50,270 (2024/25 rates). Class 2 NI is a separate flat charge of £3.45 per week if your profits exceed the small profits threshold of £12,570. Both are paid via Self Assessment.

What counts as an allowable business expense?

Expenses that are incurred wholly and exclusively for the purpose of your business are generally deductible. Common examples include: office or desk rental, business software and subscriptions, professional development and training, work-related travel, professional indemnity insurance, accountant fees, equipment used for work, and a proportion of home costs if you work from home. Personal expenses are not deductible, and for mixed-use items only the business proportion is allowed.

How often should I make estimated tax payments?

US: quarterly estimated tax payments are due in April, June, September, and January. If you expect to owe more than $1,000 in federal tax, you should make quarterly payments to avoid underpayment penalties. UK: HMRC uses payments on account - two equal payments in January and July, each equal to 50% of the previous year's tax bill. If your first year is significantly different, you can reduce payments on account, but you should contact HMRC.

Does this include state taxes (US)?

No. This calculator covers federal income tax and federal self-employment tax only. Most US states also charge income tax, ranging from 0% (e.g. Texas, Florida) to 13.3% (California). Add your state's rate to the federal estimate to get a more complete picture.

Is this estimate accurate enough to use for filing?

This tool is designed for planning and estimation, not for preparing your actual tax return. It does not account for retirement account deductions, health insurance deductions for self-employed individuals, credits, alternative minimum tax, or many other factors. Always use HMRC's Self Assessment (UK) or tax preparation software (US) for your actual filing.

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