Calculators
Freelancer Tax Set-Aside Calculator: How Much to Hold Back Each Payment (US)
Enter a payment and your deductions, and see how much to move to your tax account right now — before you spend any of it.
You invoice $5,000. It feels like $5,000. It isn't — not until tax is paid. The freelancers who get hurt aren't the ones who earn too little; they're the ones who spend the tax share and meet the bill with an empty account.
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The calculator
Try your own numbers
Every payment that lands is not all yours. Move the tax share out first, the same day, before you spend any of it.
One client payment, not your whole month.
Only costs tied to this work.
25% is a common starting point in the US. Your rate depends on income, deductions, and state.
Set aside $1,050.00 from this payment
Net after expenses: $4,200.00. You can safely plan around $3,150.00. The $1,050.00 goes in a separate account and stays there until the tax payment is due.
Formula: (payment − expenses) × set-aside % = amount to reserve.
Consult a tax professional. This is a reserve estimate, not a tax calculation. Self-employment tax alone is 15.3% on net earnings in the US, before income tax — which is why the reserve looks high. Your actual bill depends on your full year, deductions, and state.
Guides that explain these inputs
A worked example, with the maths shown
A $5,000 payment with $800 of expenses leaves $4,200 net. At a 25% reserve, set aside $1,050 and plan around $3,150. Why 25%? Self-employment tax is 15.3% on net earnings in the US, and income tax sits on top. Some people need less, some need more — the calculator lets you test your own rate.
The formula
(payment received − business expenses) × set-aside % = amount to reserve.
Assumptions and limits — read this before you trust the number
| Assumption | What it means for you |
|---|---|
| US only | This page uses US concepts (self-employment tax, estimated quarterly payments). It does not cover other countries' systems. |
| 25% is a starting point, not advice | It is widely used as a rough reserve. Your rate depends on total income, deductions, and state tax. |
| Expenses must be real | Only genuine business expenses reduce the net figure. Guessing at expenses to shrink the reserve is how underpayment happens. |
Last checked: 25 October 2026. Figures are illustrative examples, not current IRS limits, unless stated. Tax rules change — re-check before filing.
What to do with the result
Use it as a starting point, then adjust for your real costs, your real months, and your real tax position. If the number surprises you, that's useful information — it usually means an input was optimistic, not that the maths is wrong.
Questions freelancers actually ask
Do I pay tax on the full payment?
No — on net earnings: income minus genuine business expenses. That's why tracking expenses matters as much as tracking income.
When do I actually pay?
In the US, estimated taxes are quarterly. The reserve account is just the holding pen until each payment is due.
Related guides
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Educational only. These numbers are estimates from the assumptions shown on the page — not advice for your situation, and not a prediction of what you'll owe or save. Tax and retirement rules change. Consult a tax professional before you act on a tax or retirement figure.