US Freelancer take-home calculator

How US freelancer take-home is calculated

A self-employed person pays both halves of FICA as self-employment tax, has no automatic withholding, and often qualifies for the Qualified Business Income (QBI) deduction.

Worked example (sole proprietor, $80,000 net business income)

• SE tax: 15.3% on 92.35% of net = ~$11,304
• Half of SE tax deductible: $5,652
• QBI deduction (simplified): ~$14,870
• Federal income tax after standard deduction: ~$5,247
• Total tax ≈ $16,551 | Take-home ≈ $63,449 (79% of gross)

Self-employment tax detail

SE tax is 12.4% Social Security (up to the $176,100 wage base) + 2.9% Medicare (uncapped), with an extra 0.9% Medicare surtax above $200,000. Because you're both employer and employee, you owe the full 15.3% — but half is deductible against income tax.

Quarterly estimated payments

With no employer withholding, the IRS expects quarterly estimated payments (mid-April, June, September, January). Underpayment penalties accrue if you owe more than $1,000 at year-end. Set aside 25–35% of every invoice in a separate account.

When to consider an S-corp

At roughly $80,000+ of net income, electing S-corp taxation can cut SE tax by splitting income into a reasonable salary (subject to payroll tax) and distributions (not subject to SE tax). The trade-off is payroll filings, a separate return, and added cost — talk to a CPA first.

Common mistakes

• Not reserving for tax. Treat 25–35% of income as not yours.
• Missing the home-office and mileage deductions.
• Mixing personal and business accounts.

What this doesn't cover

• State income and business taxes
• Multi-state filings, foreign earned income exclusion
• Specific equipment depreciation (Section 179)