The most common question from first-time freelancers and gig workers: how much of my income should I save for taxes? The honest answer is: 25–30% of your net income is a reliable buffer for most 1099 workers. Here is exactly why, broken down into the two taxes you actually owe.
1. Self-employment (SE) tax — 15.3%. This replaces the Social Security and Medicare taxes that employers normally split with employees. As a freelancer, you pay both halves. It applies to your net earnings (revenue minus business expenses), and you can deduct half of it from your gross income on your federal return.
2. Federal income tax — 10–37% depending on bracket. Your net self-employment income (after the SE tax deduction and standard deduction) is taxed at ordinary income rates. Most single filers earning $40,000–$90,000 in net profit land in the 22% bracket.
| Net Profit | SE Tax (15.3%) | Federal Income Tax* | Set Aside |
|---|---|---|---|
| $20,000 | $3,060 | ~$1,000 | ~20% |
| $40,000 | $6,120 | ~$3,200 | ~23% |
| $60,000 | $9,180 | ~$6,400 | ~26% |
| $80,000 | $12,240 | ~$10,200 | ~28% |
* Single filer, standard deduction, no dependents. Estimates only.
Get My Exact Tax Estimate →This page is for informational purposes only and does not constitute tax advice. Tax rates are based on 2025 IRS guidelines. Consult a qualified tax professional for personalized guidance.