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By Jason Erskine · Updated May 31, 2026 · Figures verified 2026-05-31

How Much to Set Aside for Taxes as a Freelancer

The short answer: most freelancers should set aside 25–35% of every dollar of profit for taxes. If you want one number to start with, 30% is a safe default for a typical full-time freelancer — then adjust up or down once you run your real figures. Two things make up that bill: self-employment tax (a flat 15.3% in 2026) and federal income tax (which depends on your bracket), plus state income tax if your state has one.

Why there’s no single percentage

Your set-aside isn’t one fixed rate because it stacks two separate taxes that behave differently:

• Self-employment (SE) tax is predictable. In 2026 it’s 15.3% — 12.4% for Social Security (up to a wage base of $184,500) and 2.9% for Medicare (no cap). It applies to 92.35% of your net profit.
• Federal income tax is progressive. A freelancer netting $30,000 sits in a low bracket; one netting $120,000 owes a much larger share. This is the part that pushes your total set-aside from the low 20s toward the mid 30s.
• State income tax adds anywhere from 0% (e.g. no-income-tax states) to ~13% depending on where you live.

So the honest answer is a range, and the only way to get your number is to run your actual income — which is what the calculator does.

What to set aside at each income level

Because income tax is progressive, your set-aside rises with your profit. The table below shows the federal set-aside for a single filer with no other income — computed live from the same engine that powers the calculator, using 2026 rates:

Two things to read off this table. First, the percentage climbs steadily — a $20k earner and a $150k earner do not set aside the same share, because higher profit pushes more income into higher tax brackets. Second, these are federal-only figures: they exclude state income tax (0% in states like Texas or Florida, up to ~13% in California) and assume no W-2 withholding is already covering part of the bill.

That’s exactly why the rule-of-thumb range (25–35%) sits above the pure federal number — you add your state, then round up for a safety buffer. Under-saving means scrambling for cash in April; over-saving just leaves a little extra in your tax account.

A worked example

Say you net $60,000 in profit after expenses in 2026, filing single with no other income:

• Self-employment tax comes to about $8,478 — 15.3% on 92.35% of your profit. (How SE tax works.)
• Federal income tax is about $4,511 — lower than the SE tax here, because half your SE tax and the standard deduction come off first.
• Federal total ≈ $12,989, or about 22% of profit.

Add your state income tax on top and round up for a buffer, and you land in the 25–30% range — which is why “set aside 30%” is a sensible starting point for a typical full-time freelancer before you refine it with real numbers.

How to actually set the money aside

Knowing the number is useless if the cash isn’t there when payments are due. The system that works for most freelancers:

1. Open a separate savings account just for taxes. Keep it at arm’s length from your operating cash — a different bank entirely if you’re tempted to dip in. A high-yield savings account is ideal: the money sits for weeks or months between quarterly payments, so it may as well earn interest while it waits.
2. Move your percentage off the top of every payment. The moment a client pays, transfer your set-aside % into that account and treat it as money that was never yours — because it wasn’t. Doing it per-invoice, instead of scrambling at quarter-end, is what keeps freelancers solvent at tax time.
3. Pay quarterly, not just at year-end. The IRS operates pay-as-you-go: it expects estimated payments through the year, and saving the money but skipping the quarterly deadlines can still trigger an underpayment penalty. Your savings account is where the money waits; the quarterly payment is when it actually leaves. (See the quarterly estimated taxes guide for the dates and how to pay.)
4. Recalculate after any big swing. A breakout month can push you into a higher bracket; a slow quarter can mean you’ve over-saved. Re-run your numbers a couple of times a year so your set-aside % tracks reality, not a January guess.

Common mistakes

• Setting aside on revenue instead of profit. You’re taxed on what’s left after deductible business expenses, not your gross. Applying your percentage to revenue over-saves; track expenses and apply it to profit.
• Forgetting state income tax. The federal table above is only part of the bill. If your state taxes income, budget for it on top — coming up short on state is one of the most common first-year surprises.
• Under-saving in year one. New freelancers routinely forget self-employment tax exists and budget as if they were still on a W-2. That’s how a no-withholding first year turns into a five-figure April bill. Build the full 15.3% SE tax into your set-aside from day one.
• Saving the money but not paying it. Stashing 30% away feels responsible, but the IRS still wants the money quarterly. Cash sitting in your account in December does nothing to prevent an underpayment penalty.
• Never adjusting the percentage. A flat 30% is a fine starting point, but a freelancer netting $150k and one netting $30k have very different real rates. Once you’ve run your actual numbers, set aside your percentage — not the rule of thumb.

Sources

• IRS — Self-Employment Tax (Social Security and Medicare)
• IRS — Estimated Tax