The short answer, and why it's a range
Many freelancers set aside somewhere between 25% and 35% of their net income for federal taxes. It's a range rather than a single number because your actual rate depends on how much you earn, your filing status, your deductions, and whether your state has an income tax. Someone earning modestly with good deductions might land near the bottom; a higher earner in a taxed state, above the top.
To replace the rule of thumb with a figure built on your real numbers, the self-employment tax calculator and the quarterly estimated tax calculator do the arithmetic.
Why the number is higher than employees expect
Freelance income carries two federal taxes, not one. The first is income tax, the same brackets everyone faces. The second is self-employment tax, a flat 15.3% covering Social Security and Medicare. An employee splits that second tax with their employer and never sees the other half; a freelancer pays all of it. That extra layer is why the set-aside percentage is higher than the income tax rate alone would suggest.
Set aside on net, not gross
The percentage applies to net profit, meaning income after business expenses, not gross billings. This matters, because every legitimate expense you track lowers the profit that gets taxed. Diligent expense tracking doesn't just save tax at filing; it lowers the amount you need to park all year. The write-off calculator shows the real after-tax cost of a business purchase.
Make it automatic
The freelancers who never stress about this rarely have more discipline than anyone else. They have a system. The reliable one is simple: open a separate savings account used only for tax, and the day any client payment lands, move your percentage into it immediately. The money is gone before it can feel spendable, and when a quarterly deadline arrives, the payment comes from an account that was always meant for it.
The trap this avoids is treating your whole balance as available. Money sitting in your checking account earmarked for tax is money you will be tempted to spend, and the temptation usually wins.
Don't double-count the tax money
One subtle error: if your emergency savings and your tax savings live in the same account, it is easy to believe you have more of a cushion than you do. Tax money is already committed; it just hasn't left yet. Keeping it in its own account removes the illusion. The runway calculator is built to separate the two.
Adjust as the year unfolds
Your set-aside rate isn't fixed for life. A strong quarter, a big deductible purchase, or a change in income all move the number. Rerunning the calculation every quarter, when you make each estimated payment, keeps the percentage honest and prevents both nasty surprises and over-saving.
Put real numbers on it
A percentage is a starting point; your actual figure comes from your income and deductions. These tools get you there: