If you freelance or earn 1099 income, no employer withholds taxes for you — so a slice of every payment is really the government's, and it is your job to set it aside. This calculator answers the one question that matters: what percent of each invoice to bank. It combines self-employment tax, the income tax your freelance income stacks on top of any W-2 pay, your state rate, and the QBI deduction into a single set-aside percentage, then turns it into a quarterly payment plan and a safe-harbor floor.

Why freelancers owe self-employment tax

Employees and employers split Social Security and Medicare taxes — 7.65% each, 15.3% total. When you are self-employed you are both, so you pay the full 15.3% yourself. That is self-employment (SE) tax, and it is calculated on 92.35% of your net earnings, on top of regular income tax. The Social Security portion (12.4%) stops at the annual wage base ($184,500 in 2026); the Medicare portion (2.9%) never caps, and an extra 0.9% kicks in above $200,000 single / $250,000 married. The one bit of relief: you deduct half of your SE tax from your income before figuring income tax.

The 25–30% rule of thumb — and why it's rough

The common advice is to set aside 25–30% of freelance income. It is a fine starting point because SE tax alone is ~14% of net earnings and most freelancers add another 10–15% in federal and state income tax. But the rule ignores everything that actually moves your number: your filing status, your state, whether you have a W-2 job pushing you into higher brackets, retirement contributions, and the QBI deduction. A modest earner in a no-tax state may only need 18%; a high earner in California can owe over 35% of every dollar. Running the real math beats guessing — under-saving leaves you scrambling in April, and over-saving ties up cash you could invest.

Quarterly due dates and the underpayment penalty

Because nobody withholds for you, the IRS expects estimated payments four times a year: April 15, June 15, September 15, and January 15 of the following year. Miss them — or underpay — and you can owe an underpayment penalty even if you settle up by the filing deadline. The penalty is essentially interest on the tax you should have prepaid. Pay online through IRS Direct Pay or EFTPS, and keep your set-aside in a separate high-yield account so it is there when each due date arrives.

Safe harbor: the easy way to stay penalty-free

The IRS gives you a shortcut. You avoid the penalty if your payments reach a safe harbor — the smaller of 90% of this year's tax or 100% of last year's tax (110% if your prior-year AGI topped $150,000). The prior-year option is powerful: if you had a breakout year, you can base payments on last year's smaller tax bill, settle the rest at filing, and still owe no penalty. The Safe Harbor tab computes both bases and tells you the lower one. First-year freelancers have no prior year to lean on, so they target 90% of the current estimate.

QBI and what this estimate leaves out

The Qualified Business Income deduction can shave up to 20% off your qualified business income, lowering the income subject to federal tax (it does not touch SE tax). Above the income thresholds — about $201,775 single / $403,550 married for 2026 — it phases down and adds W-2/UBIA tests and a specified-service-business limit that hits many consultants, designers, writers, and lawyers. This tool models the basic 20% with a conservative phase-down. It also uses a single approximate state rate, treats your freelance income as your only business, and does not handle every credit, local tax, or surtax. Treat the result as a strong planning estimate — then confirm the details with the IRS or a CPA before you file.