The nature of being a self-employed freelancer means there’s no employer to make tax deductions on your behalf through Pay As You Earn (PAYE), and so it’s your responsibility to get everything right yourself.
Your destiny is also in your own hands as a freelancer, meaning you set your own payment terms, and find your own clients.
But how do you ensure you’re setting the right rate to cover your time, holidays, sick leave and your pension?
Thankfully, there are some useful tax calculators available online which help to remove some of the guesswork – so that you can get back to doing what you do best.
Limited company or sole trader tax calculator
The way you pay tax as a freelancer depends on how you choose to set up in the first place. For most freelancers, this usually means operating as either a sole trader or a limited company, with each having different rules for reporting and paying tax (as well as different tax rates).
In order to ensure you’re operating in the most tax-efficient way possible, you can use a tax calculator to estimate how much tax you’d pay on your profits as a sole trader versus as a limited company.
The calculator will provide an overview of which structure is likely to be more tax-efficient for you, based on your own unique circumstances.
Just remember that the amount of tax you’ll pay isn’t the only reason why you might choose one structure over another!
Freelance rate calculator
Seeing as you don’t earn a typical salary, setting the right rates can be critical to your success as a freelancer, but it’s easy to get them wrong.
If you charge too much, you may struggle to attract clients, let alone retain their business. Conversely, if you charge too little, you risk overworking yourself in pursuit of diminishing returns. You might even put people off if you seem too cheap!
Your rates should be based on a variety of factors, including your income goals, your expenses, and the number of hours you work.
A freelance rate calculator (hourly or daily) can assist you in setting sustainable rates whilst also covering all expenses and taxes, and this should help to ensure a profitable business model.
It also enables you to factor in all costs and time spent on non-billable tasks, increasing your overall accuracy.
VAT calculator
If your business is VAT-registered, you must regularly report your taxes to HMRC. Depending on your numbers, you will either owe money or be eligible for a refund.
- You owe HMRC: If you collected more VAT on your sales than you paid out on business expenses in the same time period
- HMRC owes you: If you paid more VAT on purchases than you charged to your customers
A VAT liability calculator estimates your upcoming bill by automatically finding the exact difference between your sales tax and purchase tax. Keeping good records will help you report everything correctly in your VAT return, but a simple online calculation will at least help you prepare!
You can also use it to compare your VAT bill using the standard scheme versus the VAT Flat Rate Scheme, helping you understand which might be more efficient for you in the long run.
Mileage calculator
Mileage claims are worked out by multiplying the rate per mile for the vehicle you used by the number of business miles you travelled in it, and a mileage calculator can simplify this for you.
The rate you can claim per mile depends on what type of vehicle you used for your journey. For example, using your car or a goods vehicle for a business trip in the 2026/27 tax year means you can claim 55p per mile for the first 10,000 miles in a tax year.
Our tip
Some bookkeeping software (such as Pandle) includes a mileage tracking tool which will you can use to track a journey, and then automatically convert it into a mileage claim in your bookkeeping.
Crypto calculator
In today’s digital world, crypto is all the rage. When it comes to paying tax, though, the way you earn your crypto profits makes a big difference.
Very generally speaking, you’ll need to pay Capital Gains Tax on the profits you earn from trading, and Income Tax on those from mining and staking.
A crypto calculator estimates how much crypto tax you owe, taking into account your total profits for the year, as well as any other income you might have.
Finding more help
If you still feel like you need help with any of this, an accountant can answer any questions you might have, check your compliance status, and make sure you’re operating in the most tax-efficient way possible.
Head over to our information hub for more guides, news and advice on navigating life as a professional freelancer, from finance to tech and more.
