Sole Trader Take Home Pay

(2 minutes to read)

When it comes to your take home pay, there will be a certain amount you’ll need to pay from your income via your tax return – here we take a look at what will affect your take home pay figure.

What is a sole trader?

As a sole trader, you will register yourself as self-employed with HMRC and
will run your own business as an individual, which means that you are personally liable for any debts or losses made.

Responsibilities include:

  • Keeping business records and proof of expenses.
  • Filing your self-assessment tax return.

For more information on starting up, read our How to set up as a Sole Trader page.

How much will my take home pay be?

The amount that you take home will depend on a number of different factors, such as:

Just like any other worker, you will need to pay tax on your earnings, the only difference being that, as a sole trader, you are taxed annually as opposed to PAYE.

And, unlike an employee, you will need to calculate this figure and pay independently through your self-assessment tax return.

There are two types of NI:

  • Class 2 – this is applicable on profits over £6,725 per year, at a rate of £3.15 a week.
  • Class 4 – applicable on profits over £11,909 per year.
    The rates are:
    – 10.25% on profits between £11,909 and £50,270
    – 3.25% on profits over £50,270

There’s also income tax to take into consideration – the amount you’ll pay each year depends on how much of your income is above your personal allowance and how much falls within each tax band.

The standard personal allowance is £12,570, which means you can earn up to this amount without having to pay tax.

The rates are as follows:

  • Basic rate – 20% (if you earn between £12,571 and £50,270)
  • Higher rate – 40% (between £50,271 to £150,000)
  • Additional rate – 45% (over £150,000)

A benefit of self-employment is that you are able to claim back on certain expenses and therefore reduce your tax bill at the end of each year.

Typical allowable expenses include:

  • Travel costs – such as fuel, parking, hire charges, train/bus/taxi/air fares, accommodation while away for business reasons.
  • Office costs – such as stationary, printer ink/cartridges, postage, phone/mobile/internet bills.
  • Clothing expenses – should you require specific protective wear, a uniform or costume.
  • Financial costs – such as hiring an accountant.
  • A proportion of costs for your heating, electricity, Council tax, mortgage interest/rent and internet/telephone use, if you work from home.

For more information on this, visit our page Sole Trader Expenses.

Self-assessment tax return

You will need to include all of the above information when completing your tax return in order to find out how much your take home pay will be.

It’s always worth setting a certain amount aside each month to ensure you have enough to cover your owed tax when it’s due by the 31st of January each year.

If you need help with your self-assessment, then we at Dolan specialise in providing accountancy services for sole traders and the self-employed.

Read our Self Assessment Tax Returns page for further information on this.

If you’d like to sign up or need any further information, please call one of our friendly experts on 01442 795 100 or email Jaime at

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Why Dolan Accountancy?

With over 25 years experience in contractor accountancy helping thousands of contractors, freelancers and the self employed, Dolan Accountancy has the specialist skills, reputation and credibility you can trust. Working closely with our sister company, Contractor Umbrella, it means we can offer one low cost, fixed fee package at £105 + VAT per month. This gives you the flexibility of using both our Limited Company Accountancy Services and our award winning Umbrella Service, for one inclusive cost. We don’t believe in tiered packages or hidden extra fees, instead we aim to give you everything you need, including:

  • Free Company Formation – This is where it all begins. Once you have decided on an available name, we will form your company free of charge (if using our accountancy services) and it will be ready for you to use in as little as three hours.
  • Free use of Contractor Umbrella – With IR35 Legislation changes we understand that sometimes you are required to contract via an umbrella company. We will keep your limited company ticking over, while you work margin free via our sister company, Contractor Umbrella.
  • A Dedicated Accountant – Your accountant will be there for any company or personal tax advice that you require. We will never outsource work, even to internal teams.
  • Free Access to FreeAgent – The founder behind the multi award winning FreeAgent platform was one of Simon’s first clients, therefore it only seems fitting that we offer all of our clients access to FreeAgent, free of charge.
  • Free Business Banking – We have decided to waive our commission so our clients can use Tide free of charge for the first year.
  • Unlimited IR35 Status Reviews – We will review all of your contracts for IR35 purposes and provide you with our professional opinion as to its status.
  • Free Registered and Director’s Service Office Address – Sometimes you just don’t want your home address on display at Companies House. When you sign up to our accountancy services, we will offer the use of our address as an alternative.
  • Your Business and Personal Taxation Needs – This includes Company Accounts, Director’s Personal Tax Return, VAT Returns, Payroll, Corporation Tax and Dividend advice, to name just a few.

If you’d like to find out more about how Dolan Accountancy can help you and your business, please give us a call on 01442 795100 or email or