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Freelance Tax Set-Aside Calculator

Some of the cash sitting in your account belongs to the tax office, not to you. This calculator tells you how much of each invoice to move into a separate savings pot so a tax bill never takes you by surprise.

Estimate only. Tax depends on your total income, deductions, and local rules. This calculator gives you a planning figure for how much to set aside. It is not a substitute for a filed tax return. Before you rely on the number, check your country's rules or ask a qualified accountant. See our freelancer tax basics.
Self-employment tax of 15.3% (Social Security + Medicare) is applied automatically on 92.35% of profit, which is the standard method.
Set aside from this payment
—
Effective tax rate—
Keep (roughly)—
· Self-employment tax—
· Income tax (fed + state)—

How much should a freelancer set aside for tax?

A common rule of thumb is to bank 25–30% of every payment. The real figure depends on where you live and what you earn, so this calculator uses your own rates to give you a specific number instead of a guess.

The United States mode

If you are self-employed in the US, you owe two things on your profit:

  • Self-employment tax of 15.3% (12.4% Social Security + 2.9% Medicare), charged on 92.35% of your net profit. It comes on top of income tax, and it catches a lot of first-year freelancers by surprise.
  • Income tax, meaning federal tax at your marginal bracket plus state income tax if your state has one.

Because no employer is withholding tax for you, most US freelancers pay quarterly estimated taxes. Setting money aside from each invoice means the cash is already there when each quarterly payment comes due.

The simple mode (any country)

Outside the US, plug in one combined rate that reflects your income tax plus any mandatory social or self-employment contributions where you live. If you are not sure, a conservative 25–30% is a reasonable starting point until you confirm your actual rate.

Put it in a separate account

The habit that works best is to move the set-aside amount into a separate savings account as soon as a client pays, then treat that money as gone. Money you cannot see is harder to spend by accident, and when the bill arrives it is already waiting for you.

Recommended

A separate business or "tax pot" account with instant transfers makes this easy to keep up. See our recommended freelancer banking options →

Frequently asked questions

Do I set aside tax on the whole invoice or just profit?

On profit, meaning the amount left after business expenses for that piece of work. If the payment is mostly your labour with few costs, the invoice and the profit are close to the same number.

Is 30% enough?

For many freelancers on modest incomes, yes. Higher earners, or those in high-tax states or countries, may need more. Use your real marginal rates here rather than a flat guess.

What about VAT/GST?

This tool covers income and self-employment tax. VAT/GST is separate. If you are registered, keep that portion aside as well. Our tax basics guide explains the difference.