Solo Biz Soft Editorial Team As a freelancer, no one takes tax out of your payments, so a bill can arrive that is larger than you expected. A simple habit fixes this: move a share of every payment into a separate pot as soon as you are paid.
A simple system
- Open a separate savings account for tax.
- Pick a starting percentage. If you are unsure, use a cautious figure and adjust later.
- Every time a client pays you, move that percentage across the same day.
- Track income and expenses. See how to track freelance income and expenses.
- Check your position each quarter and adjust the percentage.
Work out the numbers
Our tax set-aside calculator shows how much to save from each invoice and each month. It does not know your tax rate, so the percentage is yours to choose.
Things to remember
- Tax rules depend on your country, income, expenses and business structure.
- Registration and payment deadlines differ, so find out yours early.
- Keep receipts and records for the period your tax authority requires.
- A good accountant often pays for themselves.
Frequently asked questions
What percentage should I save for tax?
It depends on your situation. Ask an accountant or check your tax authority’s guidance.
Should the tax money be in a separate account?
Many freelancers find it easier because it is harder to spend by accident.
When are freelance taxes due?
It depends on your country. Check your tax authority for deadlines.
Related reading: Freelance Cash Flow · Freelance Business Setup Checklist
This article is general information and not tax advice. Rules differ by country.