Calculator · Sole trader vs Ltd
Take-home pay calculator
Compare two illustrative routes using the same trading profit and transparent 2026/27 assumptions.
Tax year 2026/27
Calculator answer
Enter your figures to estimate the result for the 2026/27 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-company take-home
£42,477
- Director salary
- £12,570
- Employer NI (company cost)
- −£1,136
- Corporation Tax
- −£7,846
- Dividends paid out
- £33,449
- Salary and dividend tax
- −£3,542
Illustrative comparison
Sole trader keeps £735 more on these assumptions.
This result excludes real-world variables and the administration of a company. Do not make a structure decision without checking your own circumstances.
How this calculator works
The calculator compares the same annual trading profit — revenue less allowable expenses — for an England, Wales or Northern Ireland sole trader and a one-director company. It shows the selected tax year in every result.
- Sole trader: Income Tax plus Class 4 National Insurance at 6% between £12,570 and £50,270, then 2%, subject to the calculation assumptions.
- Limited company: salary, employer National Insurance above the £5,000 secondary threshold, Corporation Tax, then tax on dividends using 10.75% / 35.75% / 39.35% rates after the £500 dividend allowance.
There is no universal profit figure at which incorporating becomes better. Salary, other income, associated companies, pension contributions, Employment Allowance eligibility, accountant costs, retained profit and personal-risk planning can all change the outcome. Use this as a scenario check, not a recommendation to incorporate.
Limitations: it assumes one company without associated companies, no student loans, no pension contributions, no benefits, no other income, no Scottish tax bands and no Employment Allowance. Seek accountant advice for a decision on your own structure.