The money difference

Per pound earned, the self-employed often keep a little more headline income: National Insurance is lower (Class 4 at 6%/2% versus Class 1), and you can deduct genuine business expenses before tax — something employees mostly can't. Our sole trader tax calculator shows your take-home on any profit.

The security difference

Against that, employment quietly bundles in a lot: paid holiday, sick pay, an employer pension contribution, and a steady cheque. Self-employed, you fund all of that yourself and ride the ups and downs of irregular income. Neither is 'better' — it's a trade of security for freedom and control.

You can be both Plenty of people keep a job and run a side business. You'll pay tax on each — PAYE on the job, Self Assessment on the self-employment — and the £1,000 trading allowance may cover very small side income. See our side hustle tax post.

Going self-employed well

If you're making the leap, our going self-employed guide covers registration, tax and setting yourself up properly — so the freedom doesn't come with a January shock.