by Asim Abbas
11 November 2026 
How to pay yourself as a sole trader: drawings and tax
How to pay yourself as a sole trader: drawings and tax
As a sole trader, you can’t pay yourself a salary. Instead, you take drawings: money you move from the business for personal use.
- Sole traders take drawings, not a salary
- Drawings aren’t deductible
- Tax is based on profit, not what you take
- Set aside tax for January and July
Drawings aren’t a business expense and don’t reduce your tax. You’re taxed on your profit, whatever you take out.
This guide explains how drawings work, how much to take and how to budget for your tax bills.
What are drawings?
Drawings are money or goods you take out of your business for yourself. As a sole trader, you and the business are the same legal person, so there’s no salary or dividend. You can take drawings whenever you like.
How you’re taxed
You pay Income Tax and Class 4 NI on your business profit, which is income minus allowable expenses. Whether you take all of that profit or leave some in the bank makes no difference to your tax.
Ifeoma, a graphic designer, makes £40,000 profit in 2026/27. She takes £2,000 a month in drawings, £24,000 a year, and leaves the rest in her business account. She’s still taxed on £40,000: Income Tax £5,486 and Class 4 NI £1,645.80, a total of £7,131.80. Leaving money in the account doesn’t reduce her bill.
Self Assessment tax calculator
Know what to set aside.
How much should you take?
- Work out monthly business costs first
- Set aside tax and NI, usually 20% to 30% of profit
- Remember payments on account in January and July
- Keep a buffer for quiet months
- Take a regular amount, then top up at year end
Building a tax pot
Many sole traders open a separate savings account and move a percentage of every payment into it. In your first year of trading, your first bill can include a full year’s tax plus a 50% payment on account, so set aside more than you think.
Fixed-fee accountancy support
Transparent monthly packages for sole traders, landlords and limited companies. Fixed fees agreed upfront, VAT included.
Get a fixed-fee quoteCall 0161 531 4179What isn’t an expense
- Drawings
- Your own pension contributions, which are relieved separately
- Your Income Tax and NI
- Personal spending through the business account
- Loan capital repayments
Taking goods or stock
If you take stock for personal use, you must add its market value to your income. For example, a café owner taking food home, or a shop owner taking products.
When a company might suit you
If you earn significantly more than you need and want to leave profits in the business, a limited company lets profits be taxed at Corporation Tax rates until you take them. But for most people who take all their profit, the 2026/27 rates make sole trading slightly cheaper. See our comparison.
See HMRC’s guide to working for yourself, our payments on account guide and our Self Assessment service.
What should I do next?
Not your drawings.
Move 20% to 30%.
Payments on account.
Frequently Asked Questions
Can a sole trader pay themselves a salary?
No. You take drawings, which are not a business expense.
Are drawings taxed?
You’re taxed on your profit, not your drawings.
How much should I set aside for tax?
Usually 20% to 30% of profit, depending on your income.
Can I take drawings any time?
Yes. There are no rules on timing.
Is it cheaper to be a limited company?
Not always. In 2026/27 many sole traders keep more if they take all their profit.
Need help with this? Wingate Accountants offers fixed-fee online accountancy support across the UK. Call 0161 531 4179 or request a quote at wingateaccountants.co.uk.
About the Author
Ali Imran
I’m Ali Imran, an accountant at Wingate Accountants. I help sole traders, landlords and directors get their returns filed early and accurately, without the last-minute panic.
