PAYE vs Self-Employed Calculator 2026/27

PAYE vs Self-Employed Calculator

✓ Verified for 2026/27

Income & Tax Details

£
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This calculator compares employed (PAYE) income with self-employed (Sole Trader) profits. Under PAYE, you pay Class 1 employee NI. When self-employed, you pay Class 2 and Class 4 NI, which have different thresholds and rates.

PAYE Take-Home
£35,000
annual net (employed)
Self-Employed Take-Home
£36,200
annual net (sole trader)
Take-Home Difference
£1,200
favouring self-employed
Better Off Option
Self-Employed
higher net take-home

Self-Employed Net Breakdown

Gross Profit £45,000
Income Tax £6,486
Self-Employed NI £2,125
Net Sole Trader Income £36,389
SE Net Pay 81%
SE Tax 14%
SE NI 5%

Employed (PAYE)

Gross Salary: £45,000
Income Tax: £6,486
Employee NI (Class 1): £2,594
Net Take-Home: £35,920

Self-Employed (Sole Trader)

Gross profit: £45,000
Income Tax: £6,486
Self-Employed NI: £2,125
Net Take-Home: £36,389

How We Calculated This

  1. Input variables: Enter the relevant amounts, rates, or percentages in the form.
  2. Real-time breakdown: The calculator applies HMRC rules and thresholds for the 2026/27 tax year to process the values.
  3. Display outputs: The visual graphs, donut charts, and tables are compiled dynamically to show your net take-home and deductions.

Real-World Examples

Standard Scenario

A basic calculation applying standard UK tax bands and allowances.

Calculation runs based on standard HMRC rules.
With Pension or Deductions

Factoring in a percentage of salary sacrifice or pension contributions.

Deductions are calculated and adjusted accordingly.

Frequently Asked Questions

Is this calculator updated for the 2026/27 tax year?

Yes, all calculators are fully updated with the latest HMRC thresholds, personal allowances, and National Insurance rates for 2026/27.

Can I use this for official tax submissions?

These tools are for estimation and illustrative purposes only. For official tax returns, please consult a qualified accountant or reference HMRC directly.

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About This Calculator

This calculator uses the latest HMRC rates for the 2026/27 tax year. For illustrative purposes only — always consult a qualified tax adviser for formal advice.