Gig Economy Tax Set-Aside Calculator

It depends on your net profit, other income, filing status, and state, which is why a single fixed percentage can miss badly in either direction. Many gig workers use a rule of thumb somewhere between 20 and 30 percent of net profit, but a person with modest profit and a low tax bracket may owe much less, while someone with a second income in a higher bracket may owe more. This calculator works out a personal figure and shows it as a share of every payout.

Yes. Self-employment tax applies to net earnings from gig work of 400 dollars or more, even if your job already withholds Social Security and Medicare from your paycheck. The Social Security part stops once your combined wages and self-employment earnings pass the yearly wage base, but the Medicare part has no cap. This calculator applies the Social Security wage base to your gig earnings alone, so it may overstate the Social Security portion if your job wages are high.

Gig apps and clients pay you gross amounts, so a percentage of each payout is the easiest number to act on. The calculator first subtracts your business costs and mileage deduction to find net profit, then adds up self-employment tax, federal income tax, and state tax, and finally divides the total by your gross income. It also shows the same tax as a share of net profit, which is the figure most tax rules of thumb refer to.

If you expect to owe 1,000 dollars or more in federal tax after withholding and credits, you generally need to make estimated payments during the year. They are typically due around April 15, June 15, September 15, and January 15. You can avoid an underpayment penalty by paying enough to meet a safe harbor, such as 90 percent of this year's tax or 100 percent of last year's tax, with a higher percentage for high earners. The quarterly figure shown here is simply one quarter of your estimated yearly total.

Common deductions include business mileage or actual vehicle costs, platform and payment fees, a share of your phone and data plan, supplies and equipment used for the work, business insurance, and tools such as software. You need records to support each one, and personal expenses are not deductible. Enter your non-mileage costs in the expenses field, and enter business miles separately so the mileage deduction can be calculated for you.

Most gig drivers use the standard mileage rate because it only needs a mileage log and covers fuel, maintenance, insurance, and depreciation in one number. The IRS sets the business rate each year and changed it during 2026, so use the rate that matches your miles. If you choose the standard rate, you generally cannot also deduct actual fuel or repair costs for the same vehicle. Only miles driven for the gig count, and the rules for the trip from home to your first job vary, so keep a log and check unclear cases with a tax professional.

The qualified business income deduction lets many self-employed people deduct up to 20 percent of their business profit from taxable income, subject to limits based on taxable income and business type. This calculator includes a simplified version that applies 20 percent of profit after the deduction for half of self-employment tax, capped at your taxable income. You can switch it off to see the effect. Higher earners should check the limits with a tax professional.

It uses a flat percentage for state tax, so it does not model state brackets, local taxes, or state-specific deductions. It also leaves out credits such as the earned income tax credit and child tax credit, the additional Medicare tax for high earners, itemized deductions, retirement contributions, and the interaction between job wages and the Social Security wage base. Treat the result as a planning estimate and confirm the details with your tax software or a tax professional.