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Tax set-aside calculator

Find the share of every payment to move into a tax savings account, so your tax bill is never a surprise.

Your numbers

$
$
Costs you can deduct reduce your taxable profit.
%
Your average (effective) rate, not your top bracket. Include state or local income tax if you pay it.
%
US: self-employment tax is 15.3% on 92.35% of net earnings, about 14.13% of profit.
$
Set aside from every payment
–
From a typical payment–
Estimated tax for the year–
Per month–
Profit before tax–
Profit after tax–

A planning estimate from the rates you enter, not tax advice. Rules, allowances and caps differ by country; check with an accountant.

How it works

  1. Profit = income − business costs.
  2. Estimated tax = profit × (income tax rate + contributions rate).
  3. Set-aside percentage = estimated tax ÷ income. Because you are paid gross, the percentage is of each payment you receive.

A simple system that works

  • Open a separate savings account just for tax.
  • Every time a client pays, move the set-aside percentage straight into it, before you spend anything.
  • If you have to pay tax in instalments during the year (the US, for example, has quarterly estimated taxes), pay them from this account.
  • Review the percentage every quarter as your income changes.

More in our 20-minute weekly bookkeeping system.

Frequently asked questions

How much should a freelancer set aside for taxes?

Enough to cover the income tax and social or self-employment contributions on your profit. Many freelancers start with 20-30% of each payment and adjust once they know their real tax rate. This calculator turns your own estimate into a percentage and an amount per payment.

Why set aside a percentage of every payment?

Because tax is usually due months after you are paid. Moving a fixed share of each payment into a separate savings account means the money is there when the bill arrives.

What is the US self-employment tax?

In the US, self-employed people pay Social Security and Medicare themselves: 15.3% on 92.35% of net earnings from self-employment, with the Social Security part capped each year. It comes on top of income tax. Check the IRS website or a tax professional for your situation.

Is this tax advice?

No. It is a planning tool based on the rates you enter. Tax rules differ by country, state and situation, so confirm your rates with an accountant or your tax authority.

Learn more

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