Freelancer tax calculator — how much to set aside
Freelance payments arrive whole, with nothing held back. Enter a typical invoice or payout and see what belongs to the IRS before you spend the rest.
What you get paid
Set aside
17% of every payment
That's $254 out of each week. Move it the day the money lands.
- Gross for the year
- $78,000
- Net profit after expenses
- $66,300
- Self-employment tax
- $9,368
- Federal income tax
- $3,824
- Total tax for the year
- $13,192
- Each quarterly payment
- $3,298
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Why freelancers feel the tax harder than drivers
Freelance work carries low costs — software, a laptop, a home office share, platform fees. That means a much larger slice of what you invoice is taxable profit, so the set-aside percentage runs higher than it does for a driver with a car to run. The default here starts at 15% expenses for that reason.
Platform fees are deductible. Upwork's service fee, Fiverr's commission and payment processing charges all come off before profit, and they add up faster than most freelancers track.
Self-employment tax of 15.3% applies first, then income tax on top. If freelancing is a second income alongside a W-2 job, raising withholding at the day job is often simpler than making quarterly payments.
Frequently asked questions
How much should a freelancer set aside for taxes?
Commonly 25-35% of profit, higher than drivers because expenses are low. The calculator above gives a percentage based on your own income, costs and state.
Does Upwork or Fiverr withhold tax?
No. Both treat you as an independent contractor. You may receive a 1099-K depending on volume, but nothing is withheld either way.
Are platform fees deductible?
Yes. Upwork service fees, Fiverr commission, connects, withdrawal fees and payment processing charges are all deductible business expenses.
What else can a freelancer deduct?
Software subscriptions, a computer and peripherals, a home office if the space is used regularly and exclusively for work, professional training, self-employed health insurance premiums, and the business share of your internet and phone.
Do I need an LLC to freelance?
No. You can operate as a sole proprietor and file Schedule C. An LLC changes liability, not your income tax — an S-corp election can change the self-employment tax picture once profit is high.
Estimates only, using projected 2026 federal figures. Not tax advice.
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