Freelance Tax Set-Aside Estimator
The freelancer's recurring cash-flow disaster is spending gross income and meeting the tax bill later. This estimates what to move aside as each invoice lands.
Result
$0.00
Where the money goes
Saving keeps your figures on this device only — nothing is sent anywhere.
Why set aside per invoice rather than per year
Because the money is only there at the moment it arrives. A freelancer who moves a fixed share of every payment into a separate account on the day it lands never faces a tax bill they cannot pay. One who waits until the bill arrives is relying on the year having gone well, and on not having spent the difference.
The estimate above works in the direction that matters: it starts from what you expect to earn, removes deductible expenses to reach taxable profit, applies your rates, and divides the result back down to a per-invoice share.
Expenses reduce tax, they do not eliminate it
Deductible expenses come off the income that gets taxed, not off the tax. Spending $1,000 on a legitimate business expense at a 30% combined rate saves roughly $300 of tax — the other $700 is money you spent. This matters because "buy it before year end, it's a write-off" is advice that only makes sense for something you needed anyway.
The double layer that catches new freelancers
In many countries self-employed people pay both income tax and a separate social or self-employment contribution, and the second one is what makes the first freelance tax bill so much larger than expected. Someone leaving employment often knows their income tax rate and does not know that a further double-digit percentage sits alongside it, because as an employee an employer was paying part of it invisibly. The two fields above are separate for exactly this reason — fill in both.
Fold the result into your rate
The set-aside figure is not an argument for earning more. It is an input into what you charge. If roughly a third of every invoice belongs to a tax authority, then a rate calculated from your desired take-home has to be grossed up before it is quoted. That is what the freelance rate calculator does, and running the two together is how a rate ends up sustainable rather than merely acceptable.
Questions
What percentage should a freelancer set aside for taxes?
There is no honest universal figure, because it depends on your country, your income level, your business structure and your deductible expenses. Many freelancers in countries with both income tax and self-employment contributions find the combined share lands somewhere around a quarter to a third of profit — but that is a planning heuristic, not your number. Enter your own rates above and confirm with a professional.
Do I pay tax on my whole income or my profit?
In most systems, on profit — income minus allowable business expenses. That is why the expenses field is here. What counts as allowable varies significantly by country, and getting it wrong in either direction costs money: overclaiming risks penalties, underclaiming means paying tax on money you already spent on the business.
Is this calculator tax advice?
No. It does arithmetic on figures you supply. It has no knowledge of your jurisdiction, your allowances or your circumstances, and nothing it outputs should be filed or relied on as a liability. It exists so you are holding roughly the right amount of cash when the real calculation happens.
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