You enter your hourly rate, weekly hours, weeks per year, business expenses, and estimated tax bracket. The tool multiplies rate by hours to get gross annual income, subtracts business expenses to find net business income, then applies the IRS self-employment tax formula (15.3% of 92.35% of net income) and your estimated income tax rate. The result is your net annual take-home, effective hourly rate, and monthly income. It does not include state taxes, the QBI deduction, or estimated quarterly payment schedules.
The IRS allows self-employed individuals to deduct the employer-equivalent portion of SE tax before calculating the tax itself. Multiplying by 92.35% (100% minus half of 15.3%) approximates this deduction. This mirrors the fact that W-2 employees don't pay income tax on the employer's share of FICA.
Enter your estimated marginal federal income tax rate. For most side hustlers, this is 22% or 24%. If your side hustle income is on top of a full-time job, use the bracket your total combined income falls into, not just the side hustle portion.
No. State tax rates range from 0% (Texas, Florida, etc.) to over 13% (California). Add your state rate to the tax bracket input for a rougher all-in estimate, or calculate state taxes separately.
Ordinary and necessary expenses for your freelance work: software subscriptions, equipment, home office costs, mileage, marketing, professional development, and similar. Keep receipts and records — the IRS requires documentation for all Schedule C deductions.
Generally yes, if you expect to owe $1,000 or more in taxes for the year. The IRS requires quarterly payments (April 15, June 15, September 15, January 15) to avoid an underpayment penalty. Use IRS Form 1040-ES to calculate quarterly amounts.
Estimate only. Results reflect your inputs and standard formulas. Double-check important decisions independently.