Small Business Tax Calculator
Estimate small business tax for US sole traders, LLCs, and S-corps, or UK limited companies. Includes self-employment tax, deductions, and quarterly payment estimates.
Disclaimer: This tool is for educational purposes. Results are estimates and should not be taken as professional advice.
Calculating tax as a small business owner is more complex than employee PAYE or W-2 withholding — you're responsible for income tax, self-employment contributions, and often quarterly payments. Our Small Business Tax Calculator estimates your tax liability across common business structures so you can plan cash flow and avoid surprises at year end.
Disclaimer: Results are estimates for planning purposes only. Consult a qualified tax professional for filing and compliance advice.
US Small Business Tax
US small businesses structured as sole proprietors or single-member LLCs pay income tax on net profit at their individual federal rate (10–37% in 2026), plus self-employment tax of 15.3% on the first $176,100 of net earnings.
Formula:
Tax Owed = (Net Profit × Income Tax Rate) + (Net Profit × 0.9235 × 0.153)
State taxes are additional.
UK Small Business Tax (2025–26)
UK limited companies pay Corporation Tax on profits:
- Profits up to £50,000 → 19% (Small Profits Rate)
- Profits above £250,000 → 25% (Main Rate)
- Profits between £50,000–£250,000 → marginal rate with relief
Sole traders pay Income Tax via Self Assessment at 20%, 40%, or 45% depending on income band.
Common Deductions That Reduce Taxable Income
Home office expenses, vehicle mileage, business equipment (Section 179), health insurance premiums, retirement contributions, professional services, marketing costs, and software subscriptions. Deductions reduce your net profit, which directly lowers the tax owed.
FAQs
How is small business tax calculated in the US?
US small businesses structured as sole proprietors or single-member LLCs pay income tax on net profit at their individual federal rate (10–37% in 2026), plus self-employment tax of 15.3% on the first $176,100 of net earnings. State taxes are additional.
What can small businesses deduct to reduce taxable income?
Common deductions include: home office expenses, vehicle mileage, business equipment (Section 179 expensing), health insurance premiums, retirement contributions, professional services, marketing costs, and software subscriptions. Deductions reduce your net profit, which directly lowers the tax owed.
What is the small business tax rate in the UK?
UK limited companies pay Corporation Tax on profits. For the 2025–26 tax year: profits up to £50,000 pay 19% (Small Profits Rate); profits above £250,000 pay 25% (Main Rate); profits between £50,000–£250,000 pay a marginal rate with relief applied.
Do I need to pay quarterly estimated taxes as a small business owner?
Yes, if you expect to owe $1,000 or more in federal taxes for the year (US), you must make quarterly estimated payments by April 15, June 15, September 15, and January 15. Underpayment attracts a penalty.
What is the difference between gross profit and taxable income for a small business?
Gross Profit = Revenue − Cost of Goods Sold (COGS). Taxable Income (Net Profit) = Gross Profit − Operating Expenses − Allowable Deductions. Tax is calculated on taxable income, not gross profit.