Why a percentage works
Your final bill depends on your whole year and your other income, but putting a fixed share of every month's profit aside means the money is there when the bill comes. Anything left over is a bonus.
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How much tax should I set aside?
A tax bill is easy to pay when the money is already put away. See how much of your profit to set aside each month, using a rule of thumb for your country.
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Put aside
£390.00
this month · 26%
A month£390.00
A week£90.00
Yours to keep£1,110.00
Where the money goes
of £1,500.00
- Put aside 26%£390.00
- Yours to keep 74%£1,110.00
Worked out on profit. Basic-rate income tax (20%) and Class 4 National Insurance (6%). Set your own rate if you pay more.
Guide
Setting money aside for tax
Profit or sales
In most countries tax is worked out on profit: sales minus the cost of what you sold, fees, postage and expenses. Some simplified regimes (such as the French micro-entrepreneur or Italian forfettario) charge on turnover instead, and the calculator switches to sales for those.
Set your own rate
The rate we suggest is a rule of thumb, not a calculation of your tax. If you also have a job, or earn more, your rate will be higher. Change it to match your own situation.
Make it a habit
- Open a separate savings account just for tax.
- Move the money every time you are paid out.
- Check the figure against your real bill once a year.
How ProfitClerk works this out for you
- The tax centre: forms, set-aside, deadlinesProfitClerk's tax centre fills your country's tax forms from your eBay sales and shows tax to put aside, thresholds, deadlines and tax-year exports.
- Your profit and loss statement, line by lineRead ProfitClerk's profit and loss for eBay sellers: net sales, every cost line, cash or accrual basis, tax year periods and a CSV export for your return.
- Choose a report period or tax yearShow any ProfitClerk report for this tax year, last tax year, or the last 3, 6 or 12 months ending on a month you pick, or custom dates on the Reports page.
Questions
How much should a self-employed person save for tax in the UK?
A common rule of thumb for basic-rate taxpayers is 20% to 30% of profit: 20% income tax plus 6% Class 4 National Insurance on profit above the personal allowance. Higher-rate taxpayers need more.
Is the set-aside the same as my tax bill?
No. It is a saving target. Your real bill depends on allowances, your other income and the rules of your country. Use it to save, then pay the actual bill.
Should I set aside from sales or profit?
From profit in most countries. The calculator uses sales only where tax is charged on turnover.
What about payments on account?
In the UK, once your bill is over £1,000 you usually pay half of next year's bill in advance twice a year. Saving monthly keeps that from being a shock.
No more surprise tax bills
ProfitClerk keeps a live estimate of the tax to put aside from your real profit, and reminds you about every deadline in your country.
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