FreelanceKit.

Self-Employment Tax Set-Aside Calculator

No employer is withholding taxes for you anymore. Enter a payment and your estimated tax rate, and this calculator tells you how much to move into a separate tax account the day the money lands.

Effective set-aside rate29.1%
Set aside from this payment$1,165
Yours to keep$2,835

Estimate only — your real rate depends on deductions, filing status, and where you live. Confirm with a tax professional.

The two taxes freelancers pay

US freelancers owe ordinary income tax plus self-employment tax. Self-employment tax is 15.3% — covering both the employee and employer halves of Social Security and Medicare — applied to 92.35% of your net self-employment earnings, which works out to an effective 14.1% on net income. Employees never see the employer half, which is why freelance tax bills feel shockingly large the first year.

Your income tax rate on top of that depends on total income, filing status, and deductions. Many freelancers use an effective rate of 10–22% as a planning number, but your real figure may differ — this is a set-aside estimate, not tax advice.

The habit that prevents the April panic

The system that works is mechanical: every time a client payment arrives, immediately transfer the set-aside percentage to a separate savings account you never touch. Quarterly estimated payments (due roughly mid-April, mid-June, mid-September, and mid-January in the US) then come out of that account painlessly.

If you set aside slightly too much, you get a refund-like buffer at year end. Setting aside too little means penalties on top of the tax — so when in doubt, round your rate up.

Frequently asked questions

What percentage should freelancers set aside for taxes?
A common range is 25–35% of net income for US freelancers, combining self-employment tax (~14.1% effective) with a typical effective income tax rate. High earners and people in states with income tax should lean toward the high end.
Do I set aside a percentage of revenue or profit?
Profit — your payments minus deductible business expenses. That's why this calculator asks for the payment amount after expenses. Setting aside a percentage of gross revenue over-saves, which is safe but ties up cash.
What happens if I skip quarterly estimated payments?
The IRS charges an underpayment penalty that accrues like interest, even if you pay everything by the annual deadline. Paying quarterly from a dedicated tax account avoids it entirely.
Is this calculator tax advice?
No — it's a planning estimate based on the rates you enter. Deductions, credits, state taxes, and filing status all change the real number, so confirm your rate with a tax professional.