Your numbers
Use one combined rate that includes income tax plus any self-employment or social contributions in your country. This is a planning estimate, not tax advice.
What to save
Set aside from every payment
–
of what you invoice
From your example invoice
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Yearly tax estimate
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Save per month
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Save per quarter
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Yearly take-home
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Monthly take-home
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Take-home
Tax
Expenses
How the tax set-aside is calculated
- Profit = yearly revenue − yearly expenses
- Tax estimate = profit × tax rate
- Set-aside % = tax estimate ÷ revenue
Because expenses reduce your taxable profit, the set-aside percentage of revenue is lower than your tax rate. Move that percentage into a separate savings account every time a client pays you.
Frequently asked questions
How much should a freelancer set aside for taxes?
Many freelancers save 20 to 30 percent of profit, but it depends on your country, income and deductions. Ask a local accountant for your exact rate.
Do I pay tax on revenue or on profit?
In most countries, on profit: revenue minus allowable business expenses. Rules differ, so check your local tax authority.
Should I keep tax money in a separate account?
Yes. Moving the set-aside percentage into savings whenever you get paid makes tax time much less stressful.