Tax Set-Aside Calculator for Freelancers 2026
Find exactly what percentage of each freelance payment to save for taxes. Covers self-employment tax, federal income tax and state taxes. Get your quarterly payment amount.
$
Total gross payments you expect to receive this year $
Software, equipment, home office, professional services, etc. %
No state tax: CA=13.3%, TX/FL=0%, NY=10.9% 0%
Recommended Set-Aside %
$0
Save per $1,000 Invoice
$0
Annual Estimated Tax
$0
Quarterly Payment Amount
Tax Rate Buildup
| Tax Component | Rate | Annual Amount | Notes |
|---|
Quarterly Payment Schedule (2026)
| Quarter | Period | Due Date | Amount |
|---|---|---|---|
| Q1 | Jan 1 β Mar 31 | April 15, 2026 | $0 |
| Q2 | Apr 1 β May 31 | June 16, 2026 | $0 |
| Q3 | Jun 1 β Aug 31 | September 15, 2026 | $0 |
| Q4 | Sep 1 β Dec 31 | January 15, 2026 | $0 |
How to Use This Tax Set-Aside Calculator
Enter your expected annual freelance income, your filing status, estimated business expenses (which reduce your taxable SE income), and your state tax rate. If you also have a W-2 job, check that box and enter your salary β this affects which federal tax bracket your freelance income falls into and reduces the Social Security wage base available for SE tax.
The calculator determines the total tax rate on your freelance income and rounds up to the nearest 5% as a practical set-aside percentage. Save that percentage of every invoice payment.
The Formula
Net SE Income = Freelance Income β Business Expenses
SE Earnings = Net SE Income Γ 0.9235
SE Tax = SE Earnings Γ 15.3% (SS on first $184,500, Medicare on all)
Deductible half of SE tax reduces AGI
Federal Marginal Rate = rate of your bracket stacked above W-2 income
State Tax = Net SE Income Γ state rate
Total Tax Rate = (SE Tax + Federal + State) Γ· Gross Freelance Income
Set-Aside % = rounded up to next 5%
SE Earnings = Net SE Income Γ 0.9235
SE Tax = SE Earnings Γ 15.3% (SS on first $184,500, Medicare on all)
Deductible half of SE tax reduces AGI
Federal Marginal Rate = rate of your bracket stacked above W-2 income
State Tax = Net SE Income Γ state rate
Total Tax Rate = (SE Tax + Federal + State) Γ· Gross Freelance Income
Set-Aside % = rounded up to next 5%
Example
Alex, single freelancer, $80,000 income, $5,000 expenses, 5% state, no W-2 in 2026:
Net SE: $75,000 | SE Earnings: $75,000 Γ 92.35% = $69,263
SE Tax: $69,263 Γ 15.3% = $10,597
SE deduction: $10,597 Γ· 2 = $5,299
AGI: $75,000 β $5,299 = $69,701; standard deduction $16,100 β taxable $54,701
Federal income tax (22% bracket): ~$7,855
State: $75,000 Γ 5% = $3,750
Total: ~$22,202 | Rate on $80,000: 27.8% β Set-aside: 30%
Per $1,000 invoice: save $300 | Quarterly payment: ~$5,550
Net SE: $75,000 | SE Earnings: $75,000 Γ 92.35% = $69,263
SE Tax: $69,263 Γ 15.3% = $10,597
SE deduction: $10,597 Γ· 2 = $5,299
AGI: $75,000 β $5,299 = $69,701; standard deduction $16,100 β taxable $54,701
Federal income tax (22% bracket): ~$7,855
State: $75,000 Γ 5% = $3,750
Total: ~$22,202 | Rate on $80,000: 27.8% β Set-aside: 30%
Per $1,000 invoice: save $300 | Quarterly payment: ~$5,550
Extended
Income Level Set-Aside Guide
Color-coded table showing recommended set-aside % at every income level for each filing status
Recommended set-aside percentages at different income levels. Color indicates urgency of setting aside funds. Based on 5% state rate β adjust for your state.
25% or less β lower burden 26β34% β moderate 35%+ β high burden
| SE Income | Single | MFJ | MFS | HoH |
|---|
Frequently Asked Questions
Why do freelancers need to set aside money for taxes?
When you work as an employee, your employer withholds federal income tax, Social Security and Medicare taxes from each paycheck. As a freelancer or independent contractor, nobody withholds taxes for you. You receive gross payment for every invoice. If you spend it all, you will have no money left when taxes are due. The IRS requires you to pay estimated quarterly taxes β failure to do so results in underpayment penalties on top of the taxes owed.
What is self-employment tax and why is it so high?
Self-employment (SE) tax is Social Security (12.4%) and Medicare (2.9%) β a combined 15.3% rate. Employees only pay half (7.65%) because their employer covers the other half. As a self-employed person, you pay both the employee and employer portions. However, you can deduct half of SE tax from your gross income, reducing your federal income tax. SE tax is calculated on 92.35% of net self-employment income (not the full amount).
When are quarterly estimated tax payments due in 2026?
The four quarterly estimated tax due dates for 2026 are: Q1 β April 15, 2026 (January 1 to March 31 income); Q2 β June 16, 2026 (April 1 to May 31 income); Q3 β September 15, 2026 (June 1 to August 31 income); Q4 β January 15, 2026 (September 1 to December 31 income). Missing these deadlines triggers an underpayment penalty even if you pay everything by April 15.
What happens if I have both W-2 and freelance income?
If you also have W-2 employment, your employer is already withholding taxes on that income. Your W-2 withholding may cover some or all of your federal income tax obligation. However, your SE income still generates SE tax (15.3% on 92.35% of net SE income). The Social Security portion is only assessed up to the $184,500 wage base, reduced by any W-2 wages already subject to SS tax. You should set aside at least enough to cover SE tax plus any federal/state marginal rate on the freelance income.
Should I set aside exactly my tax rate, or more?
Most financial advisors recommend rounding up to the nearest 5% for your set-aside percentage to give yourself a buffer. Tax calculations involve many variables (deductions you may qualify for, estimated vs actual income, state adjustments). A slightly higher set-aside means you will likely get a refund rather than owe money. The recommended set-aside shown in this calculator already includes a rounding-up adjustment. Any excess accumulates as savings if your actual tax bill is lower.