How freelance taxes work
- Freelancers and self-employed workers pay self-employment tax (15.3%) on top of regular income tax.
- You can deduct business expenses to reduce your taxable profit.
- Quarterly estimated payments are due in April, June, September and January.
The self-employment tax explained
When you work for an employer, they pay half of your Social Security and Medicare taxes. As a freelancer, you pay both halves — that is the 15.3% self-employment tax. It applies to 92.35% of your net profit (a small deduction is built in).
On top of that, your net profit is also subject to regular federal income tax based on your bracket. This tool estimates both and divides the total by four to give you your quarterly payment.
Frequently asked questions
What counts as a business expense?
Home office, equipment, software subscriptions, professional services, travel for work, health insurance premiums and more. Keep receipts for everything.
When are quarterly taxes due?
April 15, June 15, September 15 and January 15 in the US. Missing payments triggers an underpayment penalty.
How much should I set aside from each payment?
A safe rule of thumb is 25-30% of every payment received. Set it aside immediately into a separate account so it is never accidentally spent.