Freelance Net Income Calculator

U.S. only tools

Revenue is not income. The money a freelancer keeps is revenue minus business expenses and deductions, then minus self-employment tax and state tax on the profit. That chain is where a "successful" six-figure year quietly becomes a modest take-home.

Freelance Net Income Calculator - Danfio

https://danfio.com/tools/freelance-net-income-calculator/ - printed from this page

Currency: USD ($) - display only, nothing was converted

What you keep a year

$75,715

$120,000 billed

Taxable profit: $95,000
Kept as % of billed: 63.1%

From billed to kept

Line	Amount
Annual revenue	$120,000
Business expenses	-$20,000
Other deductions	-$5,000
Taxable profit	$95,000
Self-employment tax	15.3%
Self-employment tax amount	-$14,535
State tax	5%
State tax amount	-$4,750
Net you keep	$75,715
Share of revenue kept	63.1%

This is before your federal income tax on the remaining profit. The point is the ratio: a freelancer who "makes $120,000" may keep only a bare majority of it once costs and payroll-style taxes are gone.

Of $120,000 billed, you keep about $75,715 - $44,285 went to costs and tax, 63.1% of every dollar billed. Two levers beat working more: trim expenses and push deductions, because reducing taxable profit lowers both the self-employment tax and the state tax at once. Setting aside a fixed % of each invoice for tax keeps the surprise bill from undoing a good year.

JavaScript is off, so the values above are the built-in defaults. Every formula used on this page is documented below, so you can still follow the math by hand.

This calculator shows every step from billed to kept, so you know what each dollar of revenue is actually worth and how many more invoices cover the share you never see.

About this freelance net income calculator

Six figures of billed work can leave a freelancer with a surprisingly modest take-home once expenses, deductions and both halves of payroll tax have taken their share. This page traces the whole chain from what was invoiced to what is actually spendable, so each dollar of revenue has a known worth rather than a hoped-for one.

Self-employment tax is charged at the standard rate on profit, not on revenue, which is why expenses matter twice: they leave the bank once and shrink the base the tax is computed on. It stops at net before personal federal income tax, and it models a sole proprietor’s figures - not a corporation’s - on numbers that never leave your device.

Treat the kept figure as a planning estimate from the numbers you enter, not a tax return, an invoice, or financial, tax or legal advice. The model stops before personal federal income tax, ignores quarterly estimated-payment timing and penalties, does not decide whether a particular expense is deductible, and assumes a sole proprietor - an S corporation, a partnership or a year that crosses the Social Security wage base all behave differently.

How this freelance net income calculator works

Revenue minus costs is taxable profit

Start with everything clients paid you, subtract business expenses and then the other deductions you enter, and you have taxable profit. That subtraction is floored at zero, so a year where costs outrun revenue reports no taxable profit rather than a negative base for the two taxes that follow.

The self-employment tax and the state tax are both computed on this profit, not on the revenue in the bank. Two freelancers billing the same $120,000 can owe very different amounts because one has $5,000 of deductible costs and the other has $45,000, which is why the page keeps the two cost fields separate from the revenue figure.

Other deductions cover retirement contributions and health-insurance premiums - lines that reduce taxable profit before any payroll-style tax lands. The page does not judge whether a particular expense is allowed; it takes the figure you enter and prints the chain, so the arithmetic stays inspectable instead of hiding inside a single combined number.

Self-employment tax feels like payroll tax

Employees split Social Security and Medicare with their employer; a sole proprietor pays both halves, which is the 15.3% self-employment tax on profit. The rate field defaults to that figure but accepts anything from 0% to 100%, because a partner in a different structure or a year that hits the Social Security wage base can land somewhere else.

State income tax on the same profit comes on top. The default is 5%, and it should be set to zero in a state with no income tax - the page applies whatever rate you type, so a remembered number from another state quietly distorts every figure below it.

Because both taxes are percentages of one base, they stack rather than interact: 15.3% plus 5% takes a fifth of the profit before the federal income tax on what remains, which is the part this page deliberately leaves for a different calculator.

The kept ratio is the number to know

Net income is taxable profit minus the self-employment tax minus the state tax, and the kept ratio is that net divided by what you billed. At the defaults - $120,000 billed, $20,000 of expenses, $5,000 of other deductions, 15.3% and 5% - the profit is $95,000, the two taxes take $14,535 and $4,750, and $75,715 survives: about 63.1 cents of every dollar invoiced.

That ratio is the honest figure to budget from, because the revenue line on a bank statement is not spendable money. A freelancer who plans around the billed figure is planning around money that already belongs to the tax authority and to the business, and the shortfall arrives all at once in April.

The page prints the whole chain rather than only the net, so each step can be checked against your own books. If the kept ratio looks wrong, the input that is wrong is usually visible one row above it.

The taxes land on profit, not on revenue

Both taxes are charged on taxable profit, which is why expenses matter twice: they take money out of the bank once, and they shrink the base the taxes are computed on. Ten thousand dollars of legitimate expenses costs ten thousand dollars of cash and saves roughly two thousand dollars of tax at the default rates.

It is also why business expenses and other deductions are separate fields even though the formula treats them the same way. They are different lines on a return and they behave differently in an audit, but both reduce the profit the two taxes see, and the page keeps them apart so the breakdown matches the records you keep.

The chain stops at net before personal federal income tax on the remaining profit, so the figure is an upper bound on what you can spend rather than a final take-home number. The related income tax calculator models that next layer; treating the kept figure here as already net of everything would flatter the year by a bracket or two. An estimate, not a return, and not tax advice.

Worked examples

Each example below was run through the calculator on this page when the site was built, so the numbers match what you see when you enter the same inputs.

$120,000 billed with $25,000 of costs

Annual revenue (billed): $120,000.00 · Business expenses: $20,000.00 · Other deductions: $5,000.00 · Self-employment tax: 15.3% · State tax on profit: 5%

What you keep a year

$75,715

$120,000 billed

Taxable profit: $95,000 · Kept as % of billed: 63.1%

$95,000 of taxable profit nets about $75,700 - about 63% of billed - the default case.

A lean business with no state tax

Annual revenue (billed): $100,000.00 · Business expenses: $12,000.00 · Other deductions: $3,000.00 · Self-employment tax: 15.3% · State tax on profit: 0%

What you keep a year

$71,995

$100,000 billed

Taxable profit: $85,000 · Kept as % of billed: 72%

An $85,000 taxable profit nets roughly $72,000 in a no-income-tax state.

A high-revenue, high-cost year

Annual revenue (billed): $200,000.00 · Business expenses: $50,000.00 · Other deductions: $10,000.00 · Self-employment tax: 15.3% · State tax on profit: 6%

What you keep a year

$110,180

$200,000 billed

Taxable profit: $140,000 · Kept as % of billed: 55.1%

A $140,000 taxable profit still nets only about 63% of the billed revenue.

An $80,000 year with a 7% state rate

Annual revenue (billed): $80,000.00 · Business expenses: $10,000.00 · Other deductions: $2,000.00 · Self-employment tax: 15.3% · State tax on profit: 7%

What you keep a year

$52,836

$80,000 billed

Taxable profit: $68,000 · Kept as % of billed: 66%

A $68,000 taxable profit nets about $52,836 - roughly 66% of billed - after $10,404 of self-employment tax and $4,760 of state tax.

Frequently asked questions

What is the difference between revenue and net income?

Revenue is everything your clients paid you. Net income is what is left after business expenses and deductions, then self-employment and state tax on the profit - the money you can actually spend.

How much self-employment tax do freelancers pay?

Often 15.3%, the combined Social Security and Medicare tax on profit, because a freelancer pays both the employee and employer halves. State income tax on the profit comes on top in most states.

How do I keep more of my freelance income?

Trim expenses and push legitimate deductions, because they lower the taxable profit that both taxes are computed on. Setting aside a fixed percentage of each invoice for tax also keeps a surprise bill from undoing a good year.

What should I do with the difference between billed and kept?

Know it, and price against it. The kept figure is your real income, so use it for budgeting and for comparing a freelance offer against a salaried job that has an employer paying half the payroll tax.

Is there income tax on top of what this shows?

Yes - this calculator stops at net before personal federal income tax, so the federal bracket on the remaining profit is a further step. The income tax calculator models that layer, or treat the kept figure here as an upper bound on what you can spend.

Assumptions and sources

Self-employment tax of 15.3% (12.4% Social Security + 2.9% Medicare) on profit follows IRS rules; state income tax varies by state.
The kept-ratio view (billed versus kept) is the calculator's own honest framing; typical solo-profit margins land well below revenue.
Not modelled: the federal income tax bracket on remaining profit, which is a further step past net-before-personal-tax.
Self-employment tax, Schedule SE and the deductions that reduce profit: US Internal Revenue Service guidance for self-employed filers.

Last reviewed 2026-09-24. Business arithmetic — not accounting, tax or legal advice. Read the full disclaimer.

Where a figure on this page comes from an official agency — HUD, IRS, FICO or a state body — the site keeps a dated snapshot of the source page in its sources library, and a scheduled job re-checks that snapshot, so the number can be traced back to the document it came from.

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From billed to kept

About this freelance net income calculator

How this freelance net income calculator works

Revenue minus costs is taxable profit

Self-employment tax feels like payroll tax

The kept ratio is the number to know

The taxes land on profit, not on revenue

Worked examples

$120,000 billed with $25,000 of costs

A lean business with no state tax

A high-revenue, high-cost year

An $80,000 year with a 7% state rate

Frequently asked questions

Assumptions and sources

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