Calculator · Sole trader vs Ltd
Take-home pay calculator
See which legal structure leaves you with more cash after tax — at the revenue you actually expect to make.
Tax year 2025/26
Calculator answer
Enter your figures to estimate the result for the 2025/26 tax year. The output is a planning estimate only and should be checked against HMRC guidance before filing or paying tax.
Sole trader take-home
£43,211
- Trading profit
- £55,000
- Income tax
- −£9,432
- Class 4 NI
- −£2,357
Limited co. take-home
£43,975
- Director's salary
- £12,570
- Corporation Tax (on retained profit)
- −£8,062
- Dividends paid out
- £34,368
- Tax on salary + dividends
- −£2,963
Verdict
Limited company keeps £763 more per year on these figures.
Reminder: limited companies also have ~£200/yr of admin (accounts filing, accountant). Worth it above roughly £35k profit if you're comfortable with a little paperwork.
How this calculator works
The calculator compares two scenarios using the same trading profit (revenue minus allowable expenses):
- Sole trader — all profit is yours; you pay income tax on it via Self Assessment plus Class 4 National Insurance (6% between £12,570 and £50,270, then 2%).
- Limited company — the company pays you a small salary (default £12,570, the personal allowance), then Corporation Tax (19% under £50k profit, 25% above £250k, marginal relief between), and the rest is paid as dividends taxed at 8.75% / 33.75% / 39.35%.
The Ltd route usually wins above ~£35k of profit, but the gap narrows since Corporation Tax rose to 25% and dividend allowances fell. For most one-person businesses earning £30–80k, the difference is £500–£3,000 a year — meaningful, but not life-changing once you factor in running costs (~£100–£200/yr for filing, plus an accountant).
Limitations: assumes you're outside IR35, take no pension contributions, aren't claiming the Employment Allowance, and live in England, Wales or NI. Scottish income tax bands differ.