How Much Tax Should I Save As A Freelancer?
(AKA: Avoiding the Tax-Time Meltdown Without Crying into Your Calculator)
Let’s talk about that moment.
You’re casually checking your bank balance, feeling all smug because you just got paid. Then suddenly…BAM!…your brain pops out, “Wait… how much of this do I actually get to keep?”
Welcome to the freelance tax panic, friend.
If you’ve ever wondered how much to save for tax as a freelancer in the UK, or if you’re terrified you’re doing it “wrong,” you’re in exactly the right place. Let’s untangle the mess and build you a stress-free tax system (that doesn’t require a maths degree or a personality transplant).
First: How Does UK Tax Work for Freelancers?
(No jargon, pinky swear.)
When you’re self-employed in the UK, nobody is automatically taking tax off your income like they would in a normal job. That means it’s your job to:
Register with HMRC (if you earn £1,000+ in a tax year)
Track what you earn and spend
File a Self Assessment tax return
Pay your Income Tax and National Insurance
You do this after the end of the tax year (which runs April–April), and the payment deadline is 31 January. That’s why loads of people suddenly realise in January that they owe money…and cue: panic.
So… How Much Should I Actually Save?
🎯 The Rule of Thumb: 25%–30% of everything you earn
Yep, every time a payment hits your account, move around 25–30% into a separate savings pot. That way, when tax time comes, you’ve already got the money ready and waiting like a little financial fairy godmother.
💡Earning more than £50k? You may want to save more to cover higher tax and student loan repayments.
Set Up a “Tax Pot” (Future You Will Thank You)
You don’t need to get fancy…just set up a second account (can even be a free savings account from your bank) and nickname it “TAX 💸” if you’re feeling spicy.
Every time you get paid:
Pop 25–30% straight into your tax pot
Forget it exists
Do a smug little dance because you're ahead of the game
Pro Tip: Automate it! Some banks like Monzo or Starling let you set up tax-saving pots and even auto-sweep a % of incoming payments. Game. Changer.
Apps + Tools to Make It Easy
Let’s be honest…manually tracking your income is a fast track to burnout. Try these freelance faves:
| Tool | What It Does |
|---|---|
| Starling Bank | Separate business account with easy “Spaces” to save for tax |
| Monzo Business | Auto-splits income into pots on payment |
| FreeAgent | Full accounting tool, free with some bank accounts |
| QuickBooks Self-Employed | Simple income & expense tracking + mileage |
| 1Tap Receipts | Snap and store receipts for easy expense claims |
Mistakes We’ve ALL Made (and How to Dodge Them)
❌ Spending every payment like it’s yours
➤ Nope! 25–30% belongs to HMRC. Sorry, babe.
❌ Waiting till January to “see what you owe”
➤ Always ends in tears and maybe a panic sale of your air fryer.
❌ Forgetting National Insurance exists
➤ Spoiler: It’s separate from Income Tax—and still due!
❌ Not keeping receipts or tracking expenses
➤ You're probably missing out on legit deductions. Let’s fix that.
It’s Okay…You’re Not Alone in This
No one hands you a tax survival kit when you go freelance. Most of us learn the hard way (usually involving a January meltdown and a frantic spreadsheet session).
But here’s the truth: you can make peace with tax. You just need a system, a bit of forward planning, and maybe a cuppa (or cocktail) while you figure it out.
Take the Stress Out of Tax, We’ve Got You 💛
Whether you want a real human to double-check your plan, or you’re just sick of wondering if you’re missing something important…
👉 Book a Power Hour with Rachael Savage
She’s a freelance finance queen who’ll help you:
Figure out exactly how much to save
Build a super simple tax system
Stop feeling overwhelmed by all the moving parts
Book now by clicking below and breathe easier before January hits.
