How to Calculate Hourly Rate from Annual Salary Uk
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Freelance Net Income & Tax Calculator
Estimate your self-employment taxes and actual take-home pay.
Single
Married (Joint)
Calculation Results
Adjusted Gross Income:$0.00
Self-Employment Tax (15.3%):$0.00
Estimated Federal Income Tax:$0.00
Estimated State Income Tax:$0.00
Annual Net Income:$0.00
Monthly Take-Home:$0.00
How to Calculate Freelance Taxes: A Complete Guide
Transitioning from a traditional W-2 employee to a 1099 freelancer or independent contractor is an exciting career move, but it shifts the entire burden of tax withholding onto your shoulders. Unlike traditional employees, freelancers must pay both the employer and employee portions of Social Security and Medicare taxes.
1. Understanding Self-Employment (SE) Tax
The current self-employment tax rate is 15.3%. This consists of 12.4% for Social Security and 2.9% for Medicare. When you work for a company, they pay half (7.65%) and you pay half. As a freelancer, you pay the full amount. However, you are allowed to deduct the "employer-equivalent portion" of your SE tax in figuring your adjusted gross income.
2. The Importance of Business Deductions
One of the biggest advantages of freelancing is the ability to deduct "ordinary and necessary" business expenses. This reduces your taxable income. Common deductions include:
Home office expenses (portion of rent/mortgage and utilities)
Software subscriptions (Adobe, Slack, Zoom)
Marketing and advertising costs
Hardware (Laptops, monitors, cameras)
Professional development and courses
3. Estimating Federal Income Tax Brackets
Federal income tax is progressive. For the 2023-2024 tax years, the brackets range from 10% to 37%. Our calculator uses an average effective tax rate estimation based on standard deductions ($14,600 for single filers in 2024). Keep in mind that your actual tax liability may vary based on specific credits like the Child Tax Credit or student loan interest deductions.
Example Calculation
If you earn $100,000 in gross revenue and have $10,000 in expenses, your net profit is $90,000.
• Your SE Tax would be approximately $12,717.
• Your Federal Income Tax (after standard deduction) would be roughly $9,800.
• After state taxes (varies by state), your actual take-home pay might be around $63,000 to $65,000.
This means you should set aside roughly 30-35% of every paycheck for taxes.
function calculateFreelanceTax() {
// Inputs
var gross = parseFloat(document.getElementById("grossRevenue").value);
var expenses = parseFloat(document.getElementById("annualExpenses").value);
var filingStatus = document.getElementById("filingStatus").value;
var stateRate = parseFloat(document.getElementById("stateTaxRate").value);
// Validate inputs
if (isNaN(gross) || gross < 0) {
alert("Please enter a valid Gross Revenue.");
return;
}
if (isNaN(expenses) || expenses < 0) { expenses = 0; }
if (isNaN(stateRate) || stateRate < 0) { stateRate = 0; }
// 1. Adjusted Business Income
var businessProfit = gross – expenses;
if (businessProfit < 0) businessProfit = 0;
// 2. Self-Employment Tax Logic
// Only 92.35% of profit is subject to SE tax
var seTaxableIncome = businessProfit * 0.9235;
var seTax = seTaxableIncome * 0.153;
// 3. Federal Taxable Income estimation
// Deduction: 1/2 of SE Tax + Standard Deduction (2024 values)
var standardDeduction = (filingStatus === "single") ? 14600 : 29200;
var halfSETax = seTax / 2;
var taxableIncome = businessProfit – halfSETax – standardDeduction;
if (taxableIncome < 0) taxableIncome = 0;
// 4. Federal Income Tax (Simplified Brackets for 2024 – Single)
var fedTax = 0;
if (filingStatus === "single") {
if (taxableIncome <= 11600) fedTax = taxableIncome * 0.10;
else if (taxableIncome <= 47150) fedTax = 1160 + (taxableIncome – 11600) * 0.12;
else if (taxableIncome <= 100525) fedTax = 5426 + (taxableIncome – 47150) * 0.22;
else if (taxableIncome <= 191950) fedTax = 17168.50 + (taxableIncome – 100525) * 0.24;
else fedTax = taxableIncome * 0.28; // Simplified for higher brackets
} else {
// Married Joint
if (taxableIncome <= 23200) fedTax = taxableIncome * 0.10;
else if (taxableIncome <= 94300) fedTax = 2320 + (taxableIncome – 23200) * 0.12;
else if (taxableIncome <= 201050) fedTax = 10852 + (taxableIncome – 94300) * 0.22;
else fedTax = taxableIncome * 0.24;
}
// 5. State Tax
var stateTax = businessProfit * (stateRate / 100);
// 6. Totals
var totalTax = seTax + fedTax + stateTax;
var annualNet = businessProfit – seTax – fedTax – stateTax;
if (annualNet < 0) annualNet = 0;
var monthlyNet = annualNet / 12;
// Update UI
document.getElementById("resAdjustedGross").innerText = "$" + businessProfit.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("resSETax").innerText = "- $" + seTax.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("resFedTax").innerText = "- $" + fedTax.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("resStateTax").innerText = "- $" + stateTax.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("resNetIncome").innerText = "$" + annualNet.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("resMonthlyNet").innerText = "$" + monthlyNet.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("resultsArea").style.display = "block";
}