Quarterly Tax Estimator

Nobody withholds tax from a freelancer’s pay — so how much should you send the IRS each quarter? Estimate the payment here, before the deadline arrives.

Estimate your quarterly tax payment

Quarterly gross self-employment income ($) What you earned this quarter, before business expenses. Use one quarter only, not the whole year. Business expenses for the quarter ($) Costs of doing the work this quarter — software, equipment, supplies, subcontractors, business travel. Expenses reduce the income that is taxed. Federal income tax rate (%) Your estimated marginal federal income tax rate. Use the rate that applies to your total annual income, not just this quarter. Many freelancers use 12–24% as a planning figure. State income tax rate (%, optional) Your state income tax rate, if your state has one. Enter 0 if your state has no income tax. Include self-employment tax (15.3%)? Self-employment tax covers Social Security and Medicare. It applies to 92.35% of your net self-employment income. Choose No only if this income is not subject to self-employment tax.

Enter your numbers and press Estimate. Your quarterly payment will appear here.

Why quarterly tax exists — and why it surprises people

An employee never sees the tax that is taken from each paycheck. The employer withholds it, sends it to the IRS, and the employee settles the small difference in April. A freelancer has no employer doing that job. The money arrives in full, it looks like income, and it is tempting to spend it — until the tax bill arrives. The IRS solves this by requiring self-employed workers to pay tax in four installments during the year, called estimated tax payments. Each payment covers roughly one quarter of the year’s income, so the bill is spread out instead of landing all at once.

Three taxes make up most of a freelancer’s bill. The first is federal income tax, charged on net income at your marginal rate — the rate on your last dollar of income, which depends on your total income for the year. The second is self-employment tax: 15.3 percent for Social Security and Medicare, charged on 92.35 percent of net self-employment income. An employer normally pays half of that; a self-employed worker pays all of it, which is why it is the part that surprises people most. The third is state income tax, if your state has one. This calculator adds all three, so the number you see is the full quarterly payment, not just the federal part.

The habit that matters more than the exact number is setting the money aside when you are paid, not when the deadline arrives. If you move a fixed share of every invoice into a separate account the day the money arrives, the quarterly payment is just a transfer — not a scramble. The calculator’s monthly set-aside figure is designed for exactly that: divide the quarterly payment by three, and move that amount each month. Read the full guide, How to Estimate Quarterly Taxes as a Freelancer, for who must pay, the safe harbor rule, and the due dates.

Worked example

Suppose this quarter you earned $22,000 gross, spent $2,000 on business expenses, your federal income tax rate is 22 percent, your state tax rate is 5 percent, and self-employment tax applies.

Net self-employment income: $22,000 − $2,000 = $20,000.
Federal income tax: $20,000 × 22% = $4,400.00.
Self-employment tax: 15.3% × 92.35% × $20,000 = 15.3% × $18,470 = $2,825.91.
State tax: $20,000 × 5% = $1,000.00.
Estimated quarterly payment: $4,400.00 + $2,825.91 + $1,000.00 = $8,225.91.
Set aside per month: $8,225.91 ÷ 3 = $2,741.97 per month.
Annualised estimate: $8,225.91 × 4 = $32,903.64 per year.

Notice how large the self-employment tax is: $2,825.91, more than a third of the total payment. That is the tax an employer would normally split with you. As a freelancer you pay the whole amount, and it is charged even in a quarter when your federal income tax is low. If you only set aside money for income tax, you will be short by thousands of dollars a year.

What this estimate does not include

This is a simplified estimate, not a tax return. It applies your federal and state rates directly to net income, so it does not include the standard deduction, itemized deductions, tax credits, or the deduction for half of your self-employment tax — all of which can lower your real bill. It also uses one quarter’s income to estimate the whole year, which works well if your income is steady and less well if one quarter is unusually large or small. A big quarter can push you into a higher tax bracket, and a slow quarter can mean you overpay. That is why the IRS offers a safe harbor: if you pay at least as much as last year’s tax bill (or 90 percent of this year’s), you can usually avoid an underpayment penalty even if the estimate is not exact.

Use the result as a planning figure and a starting point for the real payment. Work out the payment on IRS Form 1040-ES, which is the official worksheet for estimated tax, and pay through IRS Direct Pay or the Electronic Federal Tax Payment System. The walkthrough in Quarterly Estimated Tax: A Practical Payment Guide shows each step. If your income varies a lot, if you have income from other sources, or if you are unsure which rate applies to you, talk to a tax professional before you send the payment — a short conversation is cheaper than a penalty and interest.

Frequently asked questions

Who has to pay quarterly estimated tax?

Generally, self-employed workers in the US who expect to owe at least $1,000 in tax for the year, after withholding and credits, should pay quarterly. If you also have a job with withholding, that withholding may cover part of the bill. The full rules, due dates, and the safe harbor are in the guide linked above.

When are quarterly payments due?

For most people, the four due dates are April 15, June 15, September 15, and January 15 of the following year. The quarters are not equal in length, and the dates can shift slightly when they fall on a weekend or holiday — check the current year’s dates on the IRS site or in the payment guide.

What happens if I pay too little?

You may owe an underpayment penalty plus interest on the shortfall, even if you pay the full amount when you file your return. Paying at least the safe harbor amount — generally 100 percent of last year’s tax, or 110 percent if your income was higher — usually avoids the penalty.

Why is self-employment tax charged on 92.35% of net income?

The IRS treats 7.65 percent of net earnings as the employer’s share of Social Security and Medicare tax, which is not taxed. So only 92.35 percent of net income (100% − 7.65%) is subject to the 15.3 percent self-employment tax rate. That is why the calculation is 15.3% × 92.35% × net income, not 15.3% × net income.

Disclaimer: This calculator provides a rough estimate for planning purposes only. It is not tax advice, and it is not a substitute for IRS Form 1040-ES or a tax professional. US federal and state tax rules change, and your actual payment depends on your total income, deductions, credits, filing status, and state. Consult a qualified tax professional before making tax decisions.