If you are self-employed, nobody withholds tax for you. This calculator uses the 2026 federal rates to estimate your self-employment tax and income tax together, then turns the total into a monthly amount to set aside and a quarterly amount to send the IRS.
Self-Employment Tax Calculator
What to set aside each month for federal taxes, using 2026 rates.
Set aside each month
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2026 estimated payment schedule
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Why self-employment tax catches people out
On a paycheck, an employer pays half of your Social Security and Medicare tax and withholds the rest. Working for yourself, you pay both halves. That is the 15.3% self-employment tax, and it lands on top of ordinary income tax. A first profitable year often produces a tax bill that is roughly double what the owner expected.
The 2026 numbers
- Social Security: 12.4% on the first $184,500 of net self-employment earnings.
- Medicare: 2.9% on all net self-employment earnings, with no cap.
- Additional Medicare: an extra 0.9% on combined earnings above $200,000 (single) or $250,000 (married filing jointly).
- Standard deduction: $16,100 single, $32,200 married filing jointly, $24,150 head of household.
- Income tax brackets: seven rates from 10% to 37%.
Two adjustments work in your favor, and the calculator applies both. Self-employment tax is charged on 92.35% of your profit, not all of it. And you deduct half of your self-employment tax when working out your income tax.
The QBI deduction
The qualified business income deduction lets most owners of sole proprietorships, partnerships, and S corporations deduct up to 20% of business profit. For 2026 the limits begin phasing in above $201,775 of taxable income for single filers and $403,500 for joint filers, and service businesses face tighter rules above those lines. Below the threshold, it is close to an automatic 20% off your business income, which is why it is on by default here.
The formula
SE tax = 12.4% (up to the wage base) + 2.9%
Taxable income = Profit + Other income − Half of SE tax − Deduction − QBI
Total federal tax = Income tax + SE tax
Worked example
A single freelance designer expects $80,000 of profit and no other income. Self-employment earnings are $73,880, producing about $11,304 in self-employment tax. Subtracting half of that plus the $16,100 standard deduction leaves roughly $58,248, and a 20% QBI deduction of about $11,650 brings taxable income to about $46,599. Federal income tax on that is roughly $5,344. The total is about $16,647, which is close to 21% of profit, or about $1,387 a month to set aside.
When quarterly payments are due
Estimated taxes are due four times a year, and the quarters are not equal lengths. If you expect to owe $1,000 or more, the IRS generally wants payments as you go. You avoid an underpayment penalty by paying at least 90% of this year's tax or 100% of last year's (110% if your prior-year income was above $150,000), which is the safe-harbor rule and the easiest target to hit.
Four habits that make tax season boring
- Open a separate tax account. Move the set-aside figure the same day money lands. If it sits in checking, it gets spent.
- Use a percentage, not a fixed amount. Transfer the same share of every deposit, so a big month funds its own bill.
- Recalculate quarterly. A profit forecast made in January is stale by June.
- Track deductions all year. Mileage, home office, health insurance premiums, and retirement contributions all reduce the bill, and they are much harder to reconstruct in April.
Frequently asked questions
How much should I set aside for taxes as a freelancer?
For most owners with profit between $50,000 and $150,000, 25% to 30% of profit covers federal self-employment and income tax. Add your state rate on top if your state has an income tax. This calculator gives you a figure based on your own profit and filing status rather than a rule of thumb.
What is the difference between self-employment tax and income tax?
Self-employment tax is Social Security and Medicare at 15.3%, charged on your business profit regardless of your deductions. Income tax is the graduated 10% to 37% tax on your taxable income after deductions. You pay both, and they are calculated on different bases.
Do I have to pay quarterly estimated taxes?
Generally yes, if you expect to owe $1,000 or more when you file. Paying at least 90% of this year's tax, or 100% of last year's (110% above $150,000 of prior-year income), keeps you inside the safe harbor and avoids underpayment penalties.
Does an S corporation reduce self-employment tax?
It can. An S corp owner pays payroll taxes on a reasonable salary but not on distributions above it, which can lower the total. It also brings payroll costs, a separate return, and IRS scrutiny of what counts as reasonable, so it usually only makes sense above roughly $60,000 to $80,000 of profit. This is a decision to make with an accountant.
Does this calculator include state taxes?
No. It covers federal self-employment and income tax only. Most states add their own income tax, and some cities do too, so add your state's rate to the set-aside figure.
What if my income changes during the year?
Recalculate each quarter with your updated profit forecast and adjust the remaining payments. Underpaying early and catching up later can still trigger a penalty, so it is better to revise upward as soon as you know.
More free small business calculators
See all thirteen on the small business calculators page.
These calculators give planning estimates, not tax, legal, or financial advice. Check important decisions with your accountant or lender.
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