Quarterly Estimated Tax Calculator
Work out your 2026 quarterly estimated tax payment on self-employment or other untaxed income, including the safe-harbour amount that protects you from the underpayment penalty.
How to use this calculator
- 1Enter the net profit you expect from self-employment this year, after expenses.
- 2Add any other taxable income and any tax already withheld from a job or pension.
- 3Enter last year's total tax and AGI if you have them — the prior-year safe harbour is usually the easiest target to hit.
- 4Pay the safe-harbour figure each quarter if your income is unpredictable; pay the full quarterly figure if you would rather not owe anything at filing.
How the calculation works
Total tax = income tax on (income − half of SE tax) + SE tax. Quarterly = (total tax − withholding) ÷ 4. Safe harbour = min(90% of this year, 100% or 110% of last year)- SE tax
- 15.3% on 92.35% of net profit — Social Security to the wage base, Medicare uncapped
- 110%
- The multiplier that applies instead of 100% when last year's AGI exceeded $150,000
Half of self-employment tax is deductible in arriving at adjusted gross income, so income tax is calculated on a smaller figure than the raw profit. Omitting that deduction overstates the bill.
The safe harbour is the more useful number for most people. Meeting it removes the underpayment penalty regardless of what you eventually owe, and the prior-year version is a fixed amount you already know.
The four periods are not equal quarters. The second covers only April and May, and the fourth runs four months — a scheduling quirk that catches people who divide the year evenly by date.
Worked example
$90,000 of freelance profit, single filer
- 1.Net earnings for SE tax are $90,000 × 92.35% = $83,115.
- 2.SE tax is 15.3% of that — Social Security at 12.4% plus Medicare at 2.9% — which comes to roughly $12,717.
- 3.Half of that, about $6,358, is deductible, so income tax is calculated on an AGI near $83,642 rather than $90,000.
- 4.Income tax on that figure plus the SE tax gives the total, divided into four instalments.
Result: Around a quarter of profit set aside for federal tax
Why estimated tax exists at all
The US tax system is pay-as-you-go. An employee satisfies that automatically because their employer withholds from every paycheque. Anyone whose income arrives without withholding — the self-employed, contractors, landlords, investors with significant gains — has to make the payments themselves, four times a year, using Form 1040-ES.
Missing them does not just defer the bill. The IRS charges an underpayment penalty, calculated as interest on the amount that should have been paid in each period, and it applies even if you pay the full balance on time in April. Generally the requirement kicks in when you expect to owe at least $1,000 after subtracting withholding and credits.
The safe harbour is the number that matters
Estimating this year's income accurately is difficult, and for freelancers with variable work it can be close to impossible. The safe harbour exists precisely for that problem: hit it, and the penalty cannot apply no matter how much you eventually owe.
There are two routes, and you only need one.
- 90% of this year's tax — the direct approach, which requires forecasting the current year reasonably well.
- 100% of last year's tax — far easier, because the figure is already known — it is a single line on the return you have already filed. This is the route most people should take.
- 110% of last year's tax — the same route, but the multiplier rises when the prior year's adjusted gross income exceeded $150,000.
Withholding is treated differently from estimated payments
One asymmetry is worth knowing because it can rescue a year that has gone wrong. Estimated payments are credited to the period in which they were actually made, so a large payment in January cannot repair a shortfall from the previous April — the penalty for that earlier period still applies.
Withholding is not treated that way. Tax withheld from wages is deemed to have been paid evenly across the whole year, whenever it actually occurred. Someone who realises in November that they have underpaid can therefore increase withholding on a salary — or on a year-end bonus or retirement distribution — and have it applied retroactively across all four periods. For anyone with both self-employment income and a job, that is often the cleanest fix available.
What this assumes, and where it stops
Assumptions
- Income is earned evenly across the year, so the liability is split into four equal instalments.
- The standard deduction is used and no credits are applied.
- Self-employment tax is calculated on the profit entered, with other income consuming the Social Security wage base first.
- Only federal tax is calculated — most states require their own estimated payments.
Limitations
- State and local estimated taxes are not calculated, and many states have their own quarterly requirements and deadlines.
- The annualised income instalment method, which helps when income is seasonal or arrives late in the year, is not modelled.
- Credits, itemised deductions, the QBI deduction and retirement contributions all reduce the real figure.
- This is a planning estimate. Confirm against Form 1040-ES or with a tax professional before making payments.
Common questions
What happens if I skip a quarterly payment?
The IRS charges an underpayment penalty, calculated like interest on the shortfall for each period it went unpaid. Paying the full balance in April does not remove it, because the system requires tax to be paid as income is earned. The penalty is usually modest rather than punitive, but it is entirely avoidable by meeting the safe harbour — and the amount grows with prevailing interest rates.
How much should I set aside from each freelance payment?
For most self-employed people at moderate income, somewhere between 25% and 30% of profit covers federal income tax plus self-employment tax, with state tax on top of that. Self-employment tax alone is 15.3% on 92.35% of profit before any income tax applies, which is why the total is higher than people expect. Running your own numbers here is better than a rule of thumb, since it depends heavily on your bracket and filing status.
Can I just increase withholding at my job instead of paying quarterly?
Yes, and it is often the better option if you have both a salary and self-employment income. Withholding is treated as paid evenly throughout the year no matter when it actually happened, so increasing it late in the year can retroactively cover earlier periods. An estimated payment cannot do that — it only counts for the period in which it was made.
Sources
- Estimated Taxes — US Internal Revenue Service
- Form 1040-ES, Estimated Tax for Individuals — US Internal Revenue Service
- Topic no. 751, Social Security and Medicare withholding rates — US Internal Revenue Service
Formula and content last reviewed on .
Results are estimates for information only, not professional advice.
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