How much tax should I save if I'm self-employed?

Updated for 2026/27 · No signup · Estimate only, not financial advice

A common rule of thumb is to set aside 25–30% of your profit for tax and National Insurance, though the right figure depends on how much you earn. Below the Personal Allowance you may owe very little; once you're into the Higher Rate band, saving closer to 35–40% is safer.

Worked example

On £30,000 profit, a sole trader pays roughly £3,486 Income Tax plus £2,272 in Class 2 & 4 National Insurance — about £5,758 in total, which is 19% of profit. Setting aside 25% would comfortably cover this with a buffer for Payments on Account.

Common mistakes

Saving a flat percentage without accounting for the Personal Allowance, and over-saving on lower profits.
Forgetting Payments on Account — HMRC may ask you to pay 50% of next year's estimated bill alongside this year's.
Not separating tax savings from everyday business cash, making it easy to accidentally spend it.

Get your exact figure

Use the Tax Set-Aside Calculator for a figure based on your actual income and expenses, or the free Tax Dashboard to track it automatically as you go.

Calculate my set-aside amount Open free tax dashboard

Related calculators

Sole Trader Tax Calculator Expense Tracker Self-Employed Hub

FAQ

Is 30% enough to save for tax as self-employed?

For most profits under the Higher Rate threshold (£50,270), setting aside 25-30% is usually enough to cover Income Tax and National Insurance. Higher earners should save closer to 35-40%.

Do I need to save for Payments on Account too?

If your tax bill is over £1,000, HMRC usually requires Payments on Account — 50% of your estimated next-year bill paid alongside your current bill. Factor this into what you set aside.

Should I keep tax savings in a separate account?

Yes, most sole traders find it easier to keep tax money in a separate savings account so it isn't accidentally spent as working capital.