How much should I set aside for taxes if I'm self-employed?

A widely used rule of thumb is to set aside 25–30% of your net self-employment income. This covers the 15.3% self-employment tax plus federal income tax. Higher earners or those in high-tax states should lean toward 30–35%.

Is 30% enough to cover self-employment taxes?

For most freelancers earning under about $80,000, 30% of net income is a safe buffer. If you have significant state income tax or are in a higher federal bracket, set aside closer to 35%.

Should I set aside based on gross or net income?

Set aside based on net income (income after business expenses), since that's what you're actually taxed on. Track expenses carefully — they directly lower how much you owe.

Where should I keep the money I set aside?

Many self-employed people move 25–30% of each payment into a separate high-yield savings account reserved for taxes, then pay quarterly estimated taxes from it.

How Much to Set Aside for Taxes When Self-Employed

Set aside 25–30% of your net self-employment income for taxes. That covers the 15.3% self-employment tax plus federal income tax. For example, if you net $50,000, reserve about $12,500–$15,000. Higher earners or people in high-tax states (like California or New York) should aim for 30–35%. Move the money to a separate account as you get paid, then pay it quarterly.

The 25–30% rule, explained

The rule combines two taxes: the flat 15.3% self-employment tax (Social Security + Medicare) and your federal income tax, which depends on your bracket. For most freelancers those add up to roughly a quarter to a third of net income — hence 25–30%.

Worked examples by income

Net $30,000: set aside ~$7,500–$9,000
Net $50,000: set aside ~$12,500–$15,000
Net $80,000: set aside ~$20,000–$24,000
Net $120,000: set aside ~$36,000+ (higher bracket + possible state tax)

Add your state

Nine states have no income tax (Texas, Florida, Washington, etc.), so 25% may be enough. High-tax states can push you toward 35%. A profession + state calculator gives you a precise number.

Get your exact number

Estimate precisely with a profession-specific calculator: freelance writers, consultants, Etsy sellers, or browse all 50 professions. See also our self-employment tax rate guide.

Frequently asked questions

How much should I set aside for taxes if I'm self-employed?: A widely used rule of thumb is to set aside 25–30% of your net self-employment income. This covers the 15.3% self-employment tax plus federal income tax. Higher earners or those in high-tax states should lean toward 30–35%.
Is 30% enough to cover self-employment taxes?: For most freelancers earning under about $80,000, 30% of net income is a safe buffer. If you have significant state income tax or are in a higher federal bracket, set aside closer to 35%.
Should I set aside based on gross or net income?: Set aside based on net income (income after business expenses), since that's what you're actually taxed on. Track expenses carefully — they directly lower how much you owe.
Where should I keep the money I set aside?: Many self-employed people move 25–30% of each payment into a separate high-yield savings account reserved for taxes, then pay quarterly estimated taxes from it.

Estimates and general information only, not tax advice. Based on 2025 US federal rules. Consult a tax professional for your situation.