Self Employment Set Aside
Calculator

Unlike employees who have taxes automatically withheld from each paycheck, self-employed individuals are generally responsible for estimating and paying their own income and self-employment taxes periodically throughout the year, rather than in one lump sum, to avoid penalties for underpayment.

It applies an estimated combined tax rate (covering income tax and self-employment tax, which funds programs employees and employers normally split) to your self-employment income for the quarter, giving you a target amount to set aside before spending the rest.

As a self-employed individual, you're generally responsible for both the employee and employer portions of certain payroll-funded programs, since there's no separate employer to split the cost with — this is why the self-employment tax rate is often noticeably higher than what's withheld from a typical employee's paycheck alone.

Underpaying your estimated taxes throughout the year can result in penalties and interest charges when you file your annual return, even if you eventually pay the full amount owed — this is why setting aside a consistent percentage each quarter, rather than waiting until year-end, helps avoid that outcome.

Typically you should base your set-aside on net income (revenue minus deductible business expenses), since that's what's actually subject to income and self-employment tax — setting aside a percentage of gross revenue before expenses will usually significantly overestimate what you actually owe.