Mastodon
All tools

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 guide

Share this result set

Every input you change updates the URL. Copy the link to send your exact scenario to a partner, accountant or friend.

Your figures

£

The same amount compared as an employed salary and as self-employed profit.

What happens to my data?

All calculations run in your browser. Nothing is sent to our servers. Copy the link to share.

Employed (PAYE)

£35,920

take-home a year

Self-employed

£36,568

take-home a year

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

EmployedSelf-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.

Related reading

Self-Employed Tax UK

What you owe on a sole-trader profit, in full.

Self-employed pension

No employer pension, so what to do instead.

Limited company vs sole trader

The other big structure decision for the self-employed.

Self-Employed Tax Calculator

Set-aside and payments-on-account on your profit.

Important: Not Financial Advice

This calculator is provided for educational and illustrative purposes only. Freedom Isn't Free is not authorised or regulated by the Financial Conduct Authority (FCA) and does not provide financial advice, investment recommendations, or tax guidance.

The projections shown are hypothetical, assume a constant rate of return, and do not account for inflation, taxes, or fees. Actual investment returns vary and you may get back less than you invest. Past performance is not a reliable indicator of future results.

Before making any financial decisions, please consult with an independent financial adviser regulated by the FCA. For help finding an adviser, visit MoneyHelper or Unbiased.

Where links to financial products appear on this page, some may be affiliate links. See our full disclaimer for details.

Something not right? Contact us

Enjoying the content?

If this site has been useful, a coffee goes a long way.

Buy us a coffee