FreelanceA client just paid you. How much of it is the IRS's?
Enter the payment and what you expect to earn this year. You get the share to move into savings today, in percent and in dollars, with the math underneath.
Set aside from this payment
28.1%
$1,403 of this $5,000 payment
You keep $3,597. Your federal bracket at this profit is 12.0%, and your average rate across the whole year is 25.8%.
Set aside 28.1%, which is $1,403 of this payment.
| The year with this payment | |
|---|---|
| Profit for 2026 | $80,000 |
| Total tax on that profit | $20,647 |
| The same year without it | |
| Profit without this payment | $75,000 |
| Total tax on that profit | $19,245 |
| What this payment adds | |
| Self employment tax | $706 |
| Federal income tax | $446 |
| State income tax | $250 |
| Set aside | $1,403 |
| As a share of the payment | 28.1% |
| Yours to keep | $3,597 |
FreelanceCFO does this for every payment you record, and keeps a running total of what belongs to the IRS.
Start freeQuestions answered.
What percentage of each payment should a freelancer set aside for taxes?
The right share is the marginal rate on that payment, which depends on how much you have already earned this year and where you live. It is usually well above the bracket rate people quote, because self employment tax comes on top. Enter your expected profit for the year and this calculator works out the exact share for your next payment instead of a rule of thumb.
Why is the set-aside higher than my tax bracket?
Because self employment tax sits on top of income tax. Each dollar of profit carries 15.3% Social Security and Medicare tax on 92.35% of it, about 14.1%, before any federal or state income tax. Half of that self employment tax is deductible, and the qualified business income deduction shaves the federal part further, so the calculator counts both rather than simply adding the rates.
Why not use my average tax rate?
Your average rate spreads the year's tax across every dollar, including the ones taxed at 10% or not at all thanks to the standard deduction. A new payment lands on top of everything you already earned, so it is taxed at the top rate you have reached. Setting aside the average undershoots on most payments, and the gap shows up as a bill in April.
What happens above the Social Security wage base?
The 12.4% Social Security part of self employment tax stops once your earnings pass $184,500 for 2026, so the set-aside rate drops for payments above that line even as your federal bracket rises. Only the 2.9% Medicare part continues, plus a 0.9% additional Medicare tax above $200,000 for a single filer or $250,000 filing jointly.
Should I set aside tax on the whole payment or only the profit?
Only the profit is taxed. If part of the payment will go on business expenses, the tax falls on what is left. This calculator treats the whole payment as profit, which is the safer assumption for a single invoice. If you know an expense is coming out of it, lower the payment figure by that amount.
Where should I keep the money I set aside?
Somewhere separate from the account you spend from, so it does not quietly become rent. A savings account you do not touch works: the money is there on each quarterly deadline and can earn a little in the meantime. Then send it to the IRS as an estimated payment by the next due date.