Sole Trader Profit Calculator
Enter your business turnover and allowable expenses to estimate your sole trader profit for the year.
Profit is generally what remains after allowable business expenses are deducted from business income. Tax rules and adjustments can mean your final taxable profit differs.
Calculate your sole trader profit
Enter your turnover and allowable expenses for the year.
Your total business income before expenses.
Enter the total business expenses you believe are allowable for tax purposes.
Eligible individuals can sometimes use the £1,000 annual trading allowance instead of deducting actual business expenses.
MoneyCalcs UK provides estimates for general information only. Your taxable business profit can differ because of tax adjustments, reliefs and individual circumstances. Check GOV.UK or seek appropriately qualified advice where necessary.
Privacy: figures entered into this calculator stay in your browser and are not sent to MoneyCalcs UK.
How do you calculate sole trader profit?
Start with your business turnover — all the income the business earned in the year before any costs. Then deduct your allowable business expenses. What remains is your business profit, and it is that figure your Self Assessment tax is based on. If you use the £1,000 trading allowance, you deduct the allowance instead of your actual expenses.
What is the difference between turnover and profit?
Turnover is money in; profit is what is left after the cost of running the business. Two sole traders with identical £60,000 turnovers can have very different profits — one with £5,000 of costs and one with £35,000. Turnover matters for things like the VAT threshold, but profit is what drives your tax bill.
Do sole traders pay tax on turnover or profit?
On profit. Income Tax and self-employed Class 4 National Insurance are charged on taxable profit, and your Personal Allowance may cover part of it. That is why keeping accurate records of allowable expenses matters — every allowable cost reduces the profit you are taxed on.
What expenses can a sole trader deduct?
Generally, costs incurred wholly and exclusively for the business. Common categories include stock and materials, office and administration costs, business travel and vehicle costs, premises costs, advertising and marketing, professional fees, and staff or subcontractor costs.
Some costs are treated differently — equipment may be dealt with through capital allowances, and anything used privately as well as for business usually has to be apportioned. Entertaining clients is not normally allowable at all.
What is the £1,000 trading allowance?
The trading allowance is up to £1,000 of trading income per tax year that eligible individuals can deduct instead of claiming actual business expenses. It is often the simpler choice for small side businesses with low running costs. You cannot claim the allowance and your expenses — it is one or the other. If your turnover is less than £1,000, the allowance cannot create a loss; your taxable trading profit is simply nil.
What happens if my sole trader business makes a loss?
If allowable expenses exceed turnover, the business has made a trading loss for the year. There are various ways a loss may be relieved for tax, and the rules depend on your circumstances and the stage your business is at. This calculator shows the loss figure only — it does not calculate loss relief or offset the loss against other income.
Next steps
Once you have a profit figure, estimate the tax on it with the Self-Employed Tax Calculator UK, or plan a monthly amount to set aside with How Much Should I Save for Tax?
Frequently asked questions
Official GOV.UK guidance
- Expenses if you're self-employed (GOV.UK)
- Tax-free allowances on property and trading income (GOV.UK)
MoneyCalcs UK provides estimates for general information only. Your taxable business profit can differ because of tax adjustments, reliefs and individual circumstances. Check GOV.UK or seek appropriately qualified advice where necessary.
Related calculators
Self-Employed Tax Calculator UK
Estimate income tax and National Insurance on your self-employed profits for either tax year.
Use calculatorHow Much Should I Save for Tax?
Set aside the right slice of every invoice so January never catches you out.
Use calculatorVAT Threshold Calculator
Track rolling 12-month turnover against the VAT registration threshold.
Use calculator