How much should a self-employed person in California set aside for taxes?

Because California layers a state income tax (roughly 1% to 12.3%) on top of federal self-employment and income tax, many California freelancers set aside about 30% to 40% of net income. This calculator estimates your specific percentage.

Do California freelancers pay the $800 franchise tax?

A sole proprietor filing a Schedule C does not pay the $800 fee. But if you form an LLC, S corporation, or corporation in California, the state charges an $800 annual minimum franchise tax, and LLCs may owe an additional gross-receipts fee.

California · For freelancers & the self-employed

California self-employed tax calculator

California adds a state income tax on top of the federal taxes every freelancer owes — so what you set aside here is higher than the national rule of thumb. Enter your net income and we'll estimate your federal self-employment tax, federal income tax, and California state income tax together.

Reviewed for accuracy by [Reviewer Name], CPA · Updated for tax year 2026 · How this is calculated · CA figures are estimates pending CPA review

Net self-employment income (your expected profit for the whole year — total income minus business expenses)

Enter your net self-employment income to begin.

Filing status (how you file — pick "Single" if you're not married)

Other income from a regular job (W-2 wages, yours or a spouse's — include it, it affects your estimate)

I run an LLC, S corp, or corporation in California — adds the $800 minimum annual franchise tax to your plan

What a self-employed Californian actually owes

Freelancers, gig workers, and 1099 contractors in California face three layers of tax, not two. On top of the federal self-employment and income tax that everyone who works for themselves pays, California charges a state income tax with some of the highest top rates in the country. That's why the familiar "set aside 25–30%" advice usually falls short here — many Californians land closer to 30–40% once state tax is counted.

California-specific notes

State income tax. California uses progressive brackets that run from 1% up to 12.3%, with an additional 1% mental-health surcharge on taxable income above $1 million. Your self-employment profit is taxed as ordinary income through these brackets — there is no separate California self-employment tax. The Franchise Tax Board (FTB), not the IRS, collects it. See California FTB: Personal Filing.

The $800 franchise consideration. If you operate as a plain sole proprietor, you file a Schedule C and owe no franchise tax. The moment you form an LLC, S corporation, or corporation in California, the state imposes an $800 minimum annual franchise tax — due even in a year with no profit — and LLCs above $250,000 in gross receipts owe an added fee on a sliding scale. This trips up many new freelancers who form an LLC for liability protection without budgeting for the $800. See California FTB: LLC.

State estimated payments. California wants its share quarterly too, on Form 540-ES — but the FTB uses uneven percentages (30% / 40% / 0% / 30% across the four periods) rather than four equal amounts, so your state schedule won't mirror your federal one. See California FTB: Estimated Tax.

How this is calculated

1. Federal self-employment tax — 15.3% (12.4% Social Security up to the wage base + 2.9% Medicare, plus 0.9% on higher earnings) on 92.35% of your net profit. See IRS: Self-Employment Tax.

2. Federal income tax — on taxable income after the federal standard deduction, half your SE tax, and a simplified 20% QBI deduction. See IRS: Estimated Taxes.

3. California income tax — we apply California's brackets to your income after the California standard deduction and the one-half-SE-tax deduction. California does not conform to the federal QBI deduction, so we don't apply it at the state level, which keeps the estimate appropriately conservative.

Want the plain-vanilla version? Our national self-employed tax calculator lets you enter any state rate, and the quarterly tax calculator splits your federal total into four payments.

Frequently asked questions

How much should I set aside as a California freelancer? Often 30–40% of net income, because California state tax stacks on top of federal. The calculator above gives your specific figure based on your income and filing status.

Do I owe the $800 franchise tax? Not as a sole proprietor. You owe it if you form an LLC, S corp, or corporation — it's an $800 annual minimum, plus a possible LLC gross-receipts fee.

Does California have a separate self-employment tax? No. SE tax is federal only. California taxes your self-employment profit as ordinary income through its regular state brackets.

Educational estimate — not tax advice. This tool combines simplified 2026 federal rules (standard deduction, a simplified QBI deduction capped at 20% of taxable income, self-employment tax including Additional Medicare) with estimated California brackets and standard deduction. California figures — brackets, standard deduction, and the $800 franchise tax — are current-year estimates pending CPA and FTB verification and may change. It does not model California credits, the mental-health surcharge in detail, itemized deductions, the LLC gross-receipts fee, or exact FTB estimated-payment percentages. Your actual liability depends on your specific situation and is not a substitute for a CPA, EA, the IRS, or the California FTB. Everything is calculated entirely in your browser — nothing you type is stored or sent anywhere.