How this calculator works
When you're a W-2 employee, taxes vanish from each paycheck before you see the money. As a freelancer, nothing is withheld — so the IRS asks you to estimate your own tax and pay it in four instalments through the year. Underpay, and you can owe a penalty on top of the tax. This calculator works out those four payments from one number: your net self-employment income, meaning what's left after business expenses.
Your total bill has up to three parts. The big surprise for new freelancers is self-employment tax — the 15.3% Social Security and Medicare tax. As an employee you only ever saw half of it; the employer quietly paid the other half. Self-employed, you pay both halves. On top sits federal income tax on your profit (after half your SE tax and the standard deduction), and then your state income tax, which ranges from nothing to over 13%.
The formulas
Self-employment tax applies to 92.35% of net earnings — 12.4% for Social Security up to the wage base, plus 2.9% for Medicare with no cap:
Federal income tax is charged on taxable income — your profit minus half the SE tax (a deduction) minus the standard deduction — run through the brackets for your filing status:
Add state tax, total the three, and divide by four for each quarterly payment.
- SE tax: 15.3% on $73,880 (92.35% of $80k) ≈
$11,304. - Federal income tax: on taxable income after the half-SE-tax deduction and the standard deduction ≈
$7,971. - State: ~5% of profit ≈
$3,717. - Total ≈ $22,992, so each quarterly payment is about
$5,748, and you'd set aside roughly 29% of every invoice.
Acronyms used on this page
- SE tax
- Self-Employment tax
- QBI
- Qualified Business Income deduction
- IRS
- U.S. Internal Revenue Service
Avoiding the underpayment penalty
The IRS expects you to pay as you earn. The simplest way to stay safe is the safe harbor rule: pay at least 90% of this year's tax, or 100% of last year's total (110% if your income is high), in even quarterly instalments, and you generally avoid penalties even if you owe more at filing. The biggest mistake freelancers make is spending the gross — treat the set-aside percentage above as money that was never yours.
Frequently asked questions
How much should I set aside for taxes?
A rough rule is 25–30% of net self-employment income, but it depends on total income, filing status, and state. This calculator gives your exact set-aside percentage — usually 20–35%.
When are quarterly taxes due?
For 2026: roughly April 15, June 15, and September 15 of 2026, and January 15 of 2027. If a date lands on a weekend or holiday, it moves to the next business day.
Is this exact?
It's a close estimate using 2026 federal brackets, the standard deduction, and a flat state rate. It doesn't model credits, other household income, QBI deductions, or the additional 0.9% Medicare surtax on high earners. For filing, confirm with a tax professional or the IRS.
Can I deduct half my self-employment tax?
Yes — half of your SE tax is deductible against income tax, and this calculator already applies that deduction before computing federal income tax.