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Employed vs Self-Employed Calculator
The same money taken as a salary (PAYE) versus as self-employment profit, side by side, for 2026/27. See the National Insurance difference on your take-home.
Read the Self-Employed Tax guideYour figures
£45,000
£
The same amount compared as an employed salary and as self-employed profit.
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Self-employed take-home a year
£36,568
Employed (PAYE) take-home
£35,920
More self-employed
£649
As a sole trader you keep £649 more a year on the same gross, mainly because Class 4 National Insurance is 6% where employee Class 1 is 8% on the same band.
Side by side
| Employed | Self-employed | |
|---|---|---|
| Income Tax | £6,486 | £6,486 |
| National Insurance | £2,594 | £1,946 |
| Take-home | £35,920 | £36,568 |
Self-employment has no employer National Insurance and lower employee-equivalent NI, but also no holiday pay, sick pay, employer pension or redundancy. The take-home gap is not the whole picture.
How this is worked out
- Same gross, two routes: the figure is taxed once as an employed salary and once as self-employment profit, using the 2026/27 Income Tax bands (the same for both).
- The difference is National Insurance: an employee pays Class 1 at 8% on earnings between £12,570 and £50,270; a sole trader pays Class 4 at 6% on the same band. Both pay 2% above £50,270.
- What is not in the numbers: employer pension contributions, paid holiday, statutory sick pay and redundancy rights, which only the employee gets. The take-home gap is the price of that security.
Frequently asked questions
Do the self-employed pay less tax than employees?
On the same gross figure, a sole trader keeps slightly more, mainly because Class 4 National Insurance is 6% on the main band where employee Class 1 is 8%. Income tax is the same. But the self-employed get no holiday pay, sick pay, employer pension or redundancy, so the higher take-home is partly compensation for that lost security.
Is employer National Insurance included?
Employer National Insurance (15% above the secondary threshold) is a cost to the employer, not a deduction from the employee, so it does not reduce an employee's take-home. The self-employed pay no employer NI at all. This calculator compares the take-home each route leaves you.
What this comparison does not capture
The numbers only cover income tax and National Insurance on the same gross figure. They do not value paid holiday, statutory sick pay, an employer pension contribution, redundancy rights, or the cost of buying income protection to replace them. Factor those in before deciding.