💼 Self-Employed Tax Reserve Calculator
As a freelancer, no tax is withheld from your revenue the way it is for an employee — you need to set money aside yourself for the tax bill. A common rule of thumb is to reserve 30 to 40% of your profit, so the tax office never comes as a surprise.
Recommended reserve
£17,500.00
Set aside per month
£1,458.33
Profit × reserve percentage: £50,000.00 × 35% = £17,500.00
Formula
Reserve = profit × reserve percentage
This is not an official tax calculation but a cautious buffer rule of thumb. The percentage you actually owe depends on your total income, deductions and tax brackets; 35% is a reasonable average guideline for most freelancers with a typical income. Set the amount aside monthly in a separate savings account so you don't accidentally spend it.
Steps
- 1Enter your revenue after deducting business expenses (i.e. your profit).
- 2Choose a reserve percentage; 30-40% is a common range depending on your income.
- 3Check the total reserve amount and the monthly amount to set aside automatically.
Reserve amount at different profit levels (35%)
| Profit | Reserve (year) | Per month |
|---|---|---|
| € 20,000 | € 7,000 | € 583 |
| € 40,000 | € 14,000 | € 1,167 |
| € 60,000 | € 21,000 | € 1,750 |
| € 80,000 | € 28,000 | € 2,333 |
Based on a 35% reserve percentage; adjust it to your own situation.
warnings
- This is an indicative rule of thumb, not tax advice. Your actual tax burden depends on your personal situation and deductions.
commonMistakes
- Reserving based on revenue instead of profit (revenue minus expenses), setting aside too much.
- Leaving the money in your regular account instead of a separate savings account, so it gets spent by accident.
- Sticking to a fixed percentage without accounting for rising income moving into a higher bracket.
useCases
- Setting a monthly savings target so the tax bill isn't a surprise.
- Running a pricing plan or hourly rate to see what's left after tax.
- Deciding whether it makes financial sense to invest or instead reserve extra this year.