How Much Should Freelancers Set Aside for Taxes? A Simple Spreadsheet Method

Pick a set-aside rate, apply it to each month's profit (income minus business expenses), and move that amount to a separate savings account the day you get paid.

Choose your rate

In the United States, self-employed people pay self-employment tax (15.3% for Social Security and Medicare) on top of income tax. Many freelancers set aside somewhere between 25% and 30% of profit as a starting point. Ask an accountant for a rate that fits your income and state.

This guide is general information, not tax advice.

The formula

Set aside = (Income − Expenses) × Rate

With income in B2, expenses in C2 and your rate in a single cell, $F$1:

=(B2-C2)*$F$1

At a 20% rate, the months below work out like this:

Plan for quarterly payments

US freelancers usually pay estimated tax four times a year, with due dates around April 15, June 15, September 15 and January 15. Add a running total of your set-aside column so you can see what is ready for each payment.

=SUM($D$2:D2)