Self-Employment Tax Explained: How Much Should You Set Aside?

When you're self-employed, no employer withholds taxes for you — so a chunk of every payment you receive is really the government's. Set it aside early and tax season becomes a non-event.

What is self-employment tax?

Self-employment (SE) tax covers Social Security and Medicare — 15.3% of your net earnings (12.4% Social Security up to the annual wage base, plus 2.9% Medicare). That's on top of regular federal and state income tax.

The simple rule: set aside 25–30%

For most freelancers, saving 25–30% of net profit covers SE tax plus federal income tax. Higher earners or high-tax states should lean toward 30–35%.

Do the math automatically

Want an exact number? Try our free 1099 tax calculator. Or let MoneyFeed maintain a live "tax jar" target that updates every time you log income or an expense — and remind you before each quarterly deadline.