Free tool · runs in your browser
How much of your profit should you set aside?
Every payment contains money that is not yours yet. Enter annual income, business expenses and the percentages you want to reserve for income tax, self-employment tax and retirement, and the calculator splits profit into what to set aside and what you can spend.
Reserve planning only. Flat percentages with no brackets, deductions, credits, state taxes, wage-base caps or payment deadlines. Not tax advice; confirm rates with your tax authority.
Set aside per payment, not per year
An annual total is hard to act on in March. The same percentages can be applied to each payment as it arrives, which keeps the reserve close to the liability and avoids a scramble at filing time. This calculator works on annual profit so you can see the full picture, then you can divide the result by twelve or by your expected number of payments.
Profit is income minus business expenses, floored at zero. That floor matters in a loss year: the model does not invent negative tax or a negative reserve. A separate savings account makes the reserve harder to spend by accident.
The three buckets
Income tax, self-employment tax and retirement are separate commitments with different rules. Income tax depends on brackets and allowances; self-employment tax funds social insurance and has its own base and caps; retirement is a personal saving choice. Treating them as one percentage hides those differences and can make a reserve look larger than the tax bill or smaller than the real obligation. A reserve you can name is easier to protect.
The calculator keeps them separate and also reports a combined set-aside percentage, so you can see what share of profit is already spoken for before deciding what lifestyle the remainder supports.
What the percentages cannot tell you
A flat percentage ignores progressive brackets, standard deductions, credits, state or local taxes and the interaction between retirement contributions and taxable income. Self-employment rates also have a wage base, deduction rules and annual changes that differ by country.
The output is a cash reserve plan, not a tax return. Check current rates with the tax authority in your jurisdiction, adjust the percentages to your situation, and review them whenever income or rules change. Quarterly estimated payments follow a separate schedule that this tool does not model. Deductions you qualify for could cut the bill sharply, so a reserve based on flat rates is deliberately cautious.
Frequently asked questions
Is 15.3% the right self-employment rate?
It is a common default in the United States, combining Social Security and Medicare, but the base, caps and deductions differ by year and country. Replace it with the rate that applies to you.
Should retirement be part of a tax set-aside?
Retirement is a personal saving choice, not a tax. It is included because both compete for the same cash. Set it to zero if you only want to reserve for tax.
Why is income tax not the marginal rate?
The model applies one flat rate to all profit. Real income tax is progressive, so the effective rate on total profit is usually below the top marginal rate; use an average estimate.
Does it cover quarterly estimated payments?
No. It shows how much to reserve, not when to pay. Dividing the set-aside by four gives a rough quarterly figure; check your jurisdiction's due dates and safe-harbour rules.