Employed & Self-Employed Tax Calculator
If you have a job and a side hustle, your tax situation is more complex than most. This calculator works out your income tax, National Insurance, Self Assessment bill, and take-home pay from both income streams.
Employed + Self-Employed Tax Calculator
2025/26 tax year · England, Wales & Northern Ireland
Leave blank or enter 0 if you have no employment income
Use your profit — revenue minus allowable business expenses
How Tax Works When You're Employed and Self-Employed
Having income from two sources means two different tax collection systems — and a gap you need to manage yourself.
PAYE handles your salary
Your employer deducts income tax and Class 1 NI from your salary each pay period using your tax code. This is automatic — you do not need to do anything. But the system only knows about your employment income.
Self Assessment handles the rest
Your self-employed profit is declared on a Self Assessment tax return. HMRC calculates the income tax owed on your combined income, subtracts what PAYE already collected, and you pay the difference — plus Class 4 NI on your profits.
The gap is your responsibility
The tax your employer does not collect does not disappear — it accumulates as a Self Assessment liability. HMRC charges interest and penalties if you pay late. The key habit: set aside a portion of your self-employed income as you earn it.
Why Your PAYE Tax Code Will Often Be Wrong
When you start earning self-employed income alongside a salary, your employer's payroll system keeps using your existing tax code — usually 1257L — which assumes your salary is your only income. It does not know about your side hustle.
This creates an underpayment. For example, if your salary is £35,000 and you earn £10,000 profit from self-employment, your combined income is £45,000. Your employer collects tax on £35,000. Tax on the extra £10,000 — at 20% basic rate in this example — sits uncollected until you file your Self Assessment return.
If your combined income exceeds £50,270, some of your self-employed profit is taxed at 40% — the higher rate. Many people are surprised by this when they file their first return.
Deadline to register for Self Assessment — after the tax year in which you first earned self-employed income.
Online SA return filing and payment deadline. Miss it and HMRC charges a £100 penalty plus interest on late tax.
A sensible amount to set aside from self-employed income each time you get paid, depending on your total income level.
Practical tip: Open a separate bank account and move a portion of every self-employed payment into it. This is your tax pot — do not touch it until your SA bill is due.
2025/26 Tax & NI Rates at a Glance
These are the rates this calculator uses. 2025/26 saw significant NI cuts for the self-employed.
Income Tax (on total income)
| Band | Income | Rate |
|---|---|---|
| Personal Allowance | Up to £12,570 | 0% |
| Basic rate | £12,571 – £50,270 | 20% |
| Higher rate | £50,271 – £125,140 | 40% |
| Additional rate | Over £125,140 | 45% |
PA tapers by £1 for every £2 of income over £100,000
National Insurance (2025/26)
| Type | On income | Rate |
|---|---|---|
| Class 1 (employee) | £12,570 – £50,270 | 8% |
| Class 1 (employee) | Above £50,270 | 2% |
| Class 4 (SE) | £12,570 – £50,270 | 6% |
| Class 4 (SE) | Above £50,270 | 2% |
| Class 2 (SE) | Abolished Apr 2024 | £0 |
Class 4 NI is calculated on SE profits via Self Assessment
Further Reading
Frequently Asked Questions
Do I need to do a Self Assessment if I have a side hustle?
Yes — in almost all cases. If your self-employed income (profit after expenses) is more than £1,000 in a tax year, you must register for Self Assessment with HMRC and file a tax return. The registration deadline is 5 October following the end of the tax year in which you first had self-employed income. If you miss this, you may face a penalty. Register at GOV.UK.
Why is my PAYE tax code wrong if I have self-employed income?
Your employer only knows about your salary. They use your tax code — usually 1257L — to deduct income tax as if your employment income is your only income. When you also earn self-employed profit, that profit pushes your total income higher and may tip some of it into a higher tax band. Your employer has no way of knowing this, so they will under-deduct tax. The shortfall becomes payable via Self Assessment by 31 January. HMRC may update your tax code in future years to collect some of this through PAYE, but this takes time to correct.
How much NI do I pay on self-employed income?
For 2025/26, the main NI charge on self-employed income is Class 4, which was cut from 9% to 6% in April 2024. You pay 6% on annual profits between £12,570 and £50,270, then 2% on profits above £50,270. Class 2 NI (previously a flat weekly charge) was abolished from April 2024 — most self-employed people no longer pay it, but you still get the state pension and benefit credits as long as your profits exceed £6,725.
What expenses can I deduct from my self-employed income?
You can deduct allowable business expenses from your self-employed revenue before calculating tax. Common examples include: office costs (stationery, phone bills), travel to clients (but not commuting), professional subscriptions, business insurance, and marketing costs. If you work from home, you can claim a proportion of household bills or use HMRC's flat rate. You can also claim the £1,000 Trading Allowance instead of itemising expenses if your gross income is below £1,000 — though this usually only applies to very small side incomes. The key test is whether the expense was incurred "wholly and exclusively" for your business.
How does tax work when you're both employed and self-employed?
Income tax applies to your combined income from all sources. HMRC aggregates your employment income and self-employed profit, then applies the Personal Allowance and rate bands to the total. However, your employer only deducts tax on your salary via PAYE — the shortfall (tax on your self-employed profit and any higher-rate tax caused by the combination) is collected through Self Assessment. National Insurance is separate: Class 1 is deducted from your salary by your employer; Class 4 is calculated on your self-employed profit and paid via Self Assessment.
When do I pay my Self Assessment tax bill?
The deadline for filing your online Self Assessment return is 31 January following the end of the tax year (which ends on 5 April). The same 31 January deadline applies for paying any tax owed for that year. If your bill is over £1,000, HMRC will also ask for Payments on Account — advance payments toward the following year's bill, due 31 January and 31 July. This catches many people out in their first year of Self Assessment, as they effectively pay 150% of their bill in January.
Does self-employed income affect my tax code?
Yes, over time. Once you have filed your first Self Assessment return, HMRC may adjust your tax code to collect some of your expected SE tax through future PAYE deductions — effectively spreading the liability across your salary. This shows up as a reduced personal allowance in your tax code (for example, code 757L instead of 1257L). Not all taxpayers experience this, and it is not always accurate. Always check your tax code letter from HMRC and query anything you do not understand.