Guides · Checked 10 October 2026

How much tax do you pay on a day rate?

Nobody takes tax off your day rate before it reaches you. You pay it yourself through Self Assessment, on your profit: what clients paid you, less your business expenses.

What you pay in 2026/27

On your profit	Income tax	Class 4 National Insurance
Up to £12,570	0%	0%
£12,571 to £50,270	20%	6%
£50,271 to £125,140	40%	2%
Over £125,140	45%	2%

The first £12,570 is your personal allowance. It shrinks by £1 for every £2 of income over £100,000. Scotland sets its own income tax rates, so this table is for England, Wales and Northern Ireland.

You no longer have to pay Class 2 National Insurance. Your year still counts towards your State Pension as long as your profits are over a small threshold.

A worked example

Say you work 150 days at £180 a day, and spend £3,000 on mileage, kit and your phone.

	Amount
Paid by clients	£27,000.00
Less expenses	−£3,000.00
Profit	£24,000.00
Income tax: 20% of £11,430	£2,286.00
National Insurance: 6% of £11,430	£685.80
Total to pay	£2,971.80

That’s about 11% of what you were paid. The £11,430 is your profit above the £12,570 allowance.

How much to put aside

Putting aside 20% to 25% of every payment is a common rule of thumb if you’re a basic-rate taxpayer. It covers the tax and leaves room for a busy year. The more you earn, the more you’ll need: once your profit passes £50,270, each extra pound is taxed at 42% between income tax and National Insurance.

The safest way is to work it out from your real profit each time you’re paid, which is what TheDayRate’s tax pot does.

Payments on account

If your tax bill is £1,000 or more, HMRC usually asks for two advance payments towards the next year, each half of this year’s bill, on 31 January and 31 July. In your first year this can feel like paying one and a half years at once, so it’s worth planning for.

Dates to know

5 October: register for Self Assessment, if you started working for yourself in the tax year that ended on 5 April.
31 January: your online tax return and any tax still owed, plus your first payment on account.
31 July: your second payment on account.

From April 2027, many crew will also send quarterly updates. See Making Tax Digital for freelance crew.

From HMRC: Income Tax rates, National Insurance if you’re self-employed, Payments on account.

This guide is general information for people working for themselves in England, Wales and Northern Ireland, not tax advice. Last checked against HMRC’s guidance on 10 October 2026. If you’re unsure about your situation, check with HMRC or an accountant.