How much should a freelancer set aside for taxes in 2026?

The short version

US freelancers and other self-employed people usually owe two layers of federal tax on net profit (what’s left after ordinary and necessary business expenses):

1. Self-employment tax — Social Security and Medicare, paid on 92.35% of net earnings, at a combined rate of 15.3%. That is about 14.13 cents of every profit dollar, before income tax.
2. Income tax — figured on taxable income after the standard deduction (and after you deduct one-half of self-employment tax). Rates for 2026 start at 10% and go up to 37%.

Add your state income tax, if any, and a safety buffer if you want one. Then divide the total by your gross freelance payments. That’s the percent to move to savings the day a client pays you.

A 25–30% rule of thumb is common because it covers self-employment tax plus mid-range federal and state income tax. It is only a starting point. A freelancer with mostly expenses, or one who also has a W-2 job, will need a different number. Use the free set-aside calculator to sketch yours.

Self-employment tax in 2026

The IRS sets the self-employment tax rate at 15.3%: 12.4% for Social Security and 2.9% for Medicare. You generally owe it if you had net earnings from self-employment of $400 or more. The tax is figured on 92.35% of net earnings (that is, net profit × 0.9235).

The Social Security portion applies only up to the annual wage base. For 2026, that base is $184,500 of combined wages and net self-employment earnings. W-2 wages count first. Medicare has no wage cap. An additional 0.9% Medicare tax can apply to earnings above $200,000 for single filers ($250,000 married filing jointly, $125,000 married filing separately).

When you figure income tax, you can deduct the employer-equivalent half of self-employment tax (the Social Security and 2.9% Medicare parts, not the extra 0.9%).

Sources: IRS, Self-employment tax; Topic no. 554; 2026 Instructions for Schedule SE.

Federal income tax brackets for 2026

These ordinary-income rates and the standard deduction are from the IRS’s tax year 2026 inflation adjustments (IR-2025-103 and Rev. Proc. 2025-32). Taxable income is what’s left after deductions — not your gross invoices.

2026 standard deduction: $16,100 if you file single or married filing separately; $32,200 if you file jointly; $24,150 if you file as head of household.

Head-of-household bracket edges follow Rev. Proc. 2025-32 as summarized by the Tax Foundation. Married filing separately generally uses half the joint thresholds (the 37% bracket begins above $384,350).

A worked example (simplified)

Suppose you expect $60,000 of freelance payments, $10,000 of deductible expenses, you file single, you have no W-2 wages, and you live in a state with no income tax. Net profit is $50,000.

• Net earnings subject to SE tax: $50,000 × 92.35% = $46,175
• Self-employment tax: $46,175 × 15.3% ≈ $7,065
• Deductible half of SE tax: ≈ $3,532
• Estimated taxable income: $50,000 − $3,532 − $16,100 standard deduction ≈ $30,368
• Federal income tax (10% on the first $12,400, 12% on the rest) ≈ $3,396
• Combined estimate: about $10,461, or 17% of gross payments (21% of net profit).

Add a 5% state tax on that same taxable income and a 5% safety buffer, and the set-aside climbs toward the mid-20s as a percent of gross. That is why many freelancers land near 25–30% — not because the IRS published that number, but because state tax and a cushion sit on top of SE tax and federal income tax.

This example leaves out the 20% qualified business income deduction, credits, itemized deductions, and other adjustments, any of which would change the result. Run your own numbers in the calculator.

Who has to make quarterly estimated payments?

For 2026, you generally must pay estimated tax if both of these apply:

1. You expect to owe at least $1,000 in tax after subtracting withholding and refundable credits, and
2. Your withholding and refundable credits will be less than the smaller of 90% of your 2026 tax or 100% of your 2025 tax (use 110% of 2025 tax if your 2025 adjusted gross income was more than $150,000, or $75,000 if you file married filing separately in 2026).

There is an exception if you had no tax liability for all of 2025 and were a U.S. citizen or resident alien all year. Farmers and fishermen use different percentages. See Form 1040-ES (2026) and IRS estimated tax FAQs.

The next payment date is January 15, 2027, for income earned September 1 through December 31, 2026. You can skip that installment if you file your 2026 return and pay the full balance by February 1, 2027. See the deadlines guide.

A habit that works better than a year-end scramble

Pick a percent (or let the calculator draft one). Open a separate savings account. On the day a payment lands, move that percent over. Adjust the percent if a quarter is unusually high or low. At each IRS due date, pay from the savings account — not from next month’s invoices.

The Quarterwise Set-Aside Tracker ($14) does this in a spreadsheet: income and expense logs, 2026 due dates, and a live set-aside percent. Or start with the free one-page cheat sheet below.

Sources

• IRS, Self-employment tax (Social Security and Medicare taxes)
• IRS Topic no. 554, Self-employment tax
• 2026 Form 1040-ES, Estimated Tax for Individuals
• IRS IR-2025-103, tax year 2026 inflation adjustments
• Rev. Proc. 2025-32 (PDF)