How much to set aside from each invoice

By FreelanceCFO. Reviewed 24 September 2026.

Short answer

For a single filer with no other income in 2026, federal income tax plus self-employment tax takes about 23 cents of each extra dollar of profit between roughly $35,000 and $85,000, and about 30 cents from there to about $160,000. Add your state rate, round up, and move that share to a separate account the day each payment lands.

Rules of thumb like "save 30%" are close for some people and badly wrong for others. The right number depends on what the next dollar costs you, not on your average rate, because every invoice is another dollar on top of the ones already earned.

The numbers

Federal and self-employment tax by net profit, single filer, 2026
Net profit for the yearTotal federal and SE taxShare of all profitTax on the next $1,000
$40,000$7,42718.6%$231 (23.1%)
$60,000$12,03720.1%$231 (23.1%)
$80,000$16,64720.8%$231 (23.1%)
$100,000$22,36522.4%$305 (30.5%)
$120,000$28,46223.7%$305 (30.5%)
$150,000$37,60825.1%$305 (30.5%)

Single filer, 2026 tax year, standard deduction, no other income, no state tax. Includes self-employment tax, the deduction for half of it, and the qualified business income deduction. Calculated with the same engine as the quarterly tax calculator. Brackets from Rev. Proc. 2025-32; Social Security wage base from the SSA.

Why the next dollar matters more than the average

Your first $16,100 of income is covered by the standard deduction and pays no income tax, but it still pays self-employment tax. Each dollar after that is taxed at a higher bracket than the ones before it. So if you set aside your average rate from every invoice, the early months look fine and the later ones leave you short.

The simple fix: set aside the "next $1,000" rate from the table from every payment, plus your state. In a year where your income turns out lower, you get money back from your own tax account, which is a much nicer surprise than the opposite.

Worked example

Expected profit this year:        $80,000
    Federal and SE on the next dollar: 23.1%
    State income tax (example):        5%
    Set-aside rate, rounded up:        30%
    
    Invoice paid today:               $5,000
    Move to tax account:              $1,500
    Yours to spend or save:           $3,500

Three details that change the answer

  • Expenses lower it. Tax is on profit, not revenue. If a $5,000 invoice had $1,000 of costs, set aside from $4,000.
  • A W-2 job raises it. Salary fills the lower brackets first, so your freelance income starts higher up. Enter both in the calculator.
  • High earners hit a cap. The 12.4% Social Security part of self-employment tax stops at $184,500 of combined earnings in 2026, while the 0.9% additional Medicare tax starts at $200,000 for single filers. IRS

Then pay it on time

A tax account only helps if the money reaches the IRS by each quarterly date. See the 2026 tax calendar for the dates and the safe harbor rule.

FreelanceCFO tracks this for you: runway, quarterly tax set-aside and who owes you money, on one screen. Free to start, no credit card.

Start free

Sources

Checked on 24 September 2026. Prices and features change, so follow the link before you rely on any of them.

Questions answered.

What percentage should a freelancer set aside for taxes?

For a single filer in 2026 with no other income, federal income tax plus self-employment tax takes about 23% of each extra dollar of profit between roughly $35,000 and $85,000, and about 30% from there to about $160,000. Add your state income tax rate and round up. Many freelancers land between 25% and 35%.

Is 30% enough to set aside for self-employment taxes?

For most single filers earning under about $85,000 of profit in a state with a low income tax, 30% is enough and often a little more than needed. Above that, or in a high tax state, it can fall short, so check your own numbers.

Should I set aside tax from the whole invoice or just the profit?

From the profit. Tax is owed on income after business expenses, so if part of an invoice covers costs you paid, set aside from the remainder.

Where should I keep money set aside for taxes?

In a separate account you do not spend from, ideally one that earns interest. The point is that the balance you see in your main account is money you can actually use.