How Much Tax Do You Owe as a Freelancer or 1099 Worker?
Estimate your self-employment tax, federal income tax, quarterly payment amount, and exactly how much to set aside each month.
Self-employed workers pay 15.3% SE tax on top of income tax — most first-year freelancers underestimate this.
15.3%
self-employment tax rate — both employee and employer halves of FICA
92.35%
of net income that self-employment tax applies to
25–30%
recommended tax reserve as a percentage of gross freelance income
Taxes as a freelancer: what to know
The SE tax surprise
Many new freelancers are shocked by self-employment tax. As an employee, your employer pays half (7.65%). As self-employed, you pay both halves (15.3%) on the first ~$176K of net earnings. Budget for this from day one.
Lower your bill with deductions
Business deductions directly reduce your net income, which reduces both federal income tax and SE tax. A $5,000 deduction at a 22% bracket + 15.3% SE tax saves you roughly $1,865 in total taxes.
Self-employed retirement accounts
A SEP-IRA lets you contribute up to 25% of net earnings (max ~$70,000/year in 2026). Solo 401(k) allows even more. These contributions are fully tax-deductible, dramatically reducing your tax bill while building wealth.
How Self-Employment Tax Is Calculated
Net income = gross income − business expenses. SE tax = net income × 0.9235 × 0.153. Federal income tax = (net income − SE tax ÷ 2) × federal rate. Total tax = SE tax + federal income tax.
This calculator provides a federal estimate only. Add your state income tax rate on top for total tax liability. Consult a CPA or tax professional for advice specific to your situation — especially if you have complex deductions or multiple income streams.