Know how much you will actually keep.
Whether you are adding VAT, estimating take-home pay, or setting aside freelancer tax reserves — a calculator gives you the estimate. Here is how to use it correctly and where it falls short.
How much VAT do I add to an invoice or remove from a price?
What is my take-home pay after income tax and NI?
How much should I set aside for quarterly freelancer tax?
What are my net proceeds after Stripe or PayPal fees?
What US state sales tax applies to my customers?
How much duty and VAT will I pay on an import?
Recommended tools
Calculators for this decision
VAT Calculator
Add or remove VAT from a price and calculate VAT amount.
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Add VAT to a net price or remove VAT from a gross price — with the correct formula for each direction.
UK Salary Calculator
Estimate UK take-home pay using simplified tax and national insurance assumptions.
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UK take-home pay estimate after income tax bands and National Insurance — with tax year selection.
USA Salary Calculator
Estimate US take-home salary using simplified federal, state, and payroll tax assumptions.
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US take-home salary after federal income tax, FICA, and state tax for major states.
Freelancer Tax Estimate Calculator
Estimate freelancer tax reserve based on revenue, expenses, and tax rate.
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Total freelancer tax liability from gross income: income tax plus self-employment tax plus suggested reserve.
Stripe Fee Calculator
Estimate Stripe fees, net payout, and gross-up amount.
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Net payout after Stripe fees and how to gross up pricing to recover the fee.
Sales Tax Calculator
Calculate sales tax, before-tax price, and final total.
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US sales tax applied or removed from a price — with common state rates.
Practical guide
Why tax calculators give estimates and how to use them correctly
Online tax calculators apply standard formulas to the inputs you provide. For UK salary, they apply the published income tax bands and National Insurance rates for the current tax year. For VAT, they apply the formula for adding or removing tax at the rate you enter. These calculations are correct for the inputs given — but they cannot reflect your specific situation.
What a tax calculator does not know: your personal allowance entitlement (which may be reduced or increased), pension contributions (which reduce taxable income), benefit-in-kind values (company car, health insurance), student loan repayments, marriage allowance transfers, or any previous income in the same tax year. All of these can change your actual tax bill significantly.
For VAT specifically: the most common mistake is calculating the wrong direction. Adding VAT to a net price is simple multiplication (net × 1.20 for 20% VAT). Removing VAT from a gross price requires division: gross ÷ 1.20. Dividing the gross by 0.20 is incorrect and gives the wrong answer. The CalcBix VAT calculator handles both directions and shows the formula.
For freelancer tax in the UK and US: the additional burden beyond income tax is the self-employment tax (US: FICA at 15.3% on net self-employment income; UK: Class 4 NICs at 9% above the lower profits limit). This is the number most freelancers underestimate when setting aside reserves. A 20% income tax rate assumption becomes a 35%+ effective rate once self-employment taxes are included.
Worked example
See it in action
Scenario: UK freelancer setting aside the right tax reserve
- 1Gross freelance income: £65,000 annual gross receipts (before any tax or allowable expenses).
- 2Allowable expenses: Professional subscriptions, home office, equipment, accountant fees: £4,500. Taxable profit: £60,500.
- 3Income tax: Personal allowance: £12,570. Basic rate (20%): £37,700. Higher rate (40%): £60,500 - £50,270 = £10,230. Total income tax ≈ £7,540 + £4,092 = £11,632.
- 4Class 4 NICs: 9% on profits between £12,570 and £50,270 = 9% × £37,700 = £3,393. 2% on profits above £50,270 = 2% × £10,230 = £205. Total NICs ≈ £3,598.
- 5Total tax: Income tax £11,632 + NICs £3,598 = £15,230 total. As a percentage of £60,500 profit: 25.2% effective rate.
Result
This freelancer's effective tax rate is approximately 25% of taxable profit. Setting aside 25–30% of each invoice for tax is the right discipline. On a £65,000 income, that is roughly £16,000–£19,500 reserved per year for the January and July SA payments.
Watch out
Common mistakes to avoid
Forgetting self-employment NICs (Class 4) when estimating tax reserve — income tax alone underestimates the total.
Using gross income instead of taxable profit as the base for tax calculations — allowable expenses reduce the taxable amount.
Using the wrong VAT formula: reverse VAT is price ÷ 1.20, not price × 0.20.
Not accounting for sales tax nexus rules when selling across US states — different states have different thresholds.
Treating salary calculator results as payslip-accurate without entering pension contributions, student loan repayment, or other adjustments.
Forgetting that payment processor fees (Stripe, PayPal) are a cost that affects your effective revenue per transaction.
Before you decide
Decision checklist
Have you deducted allowable expenses before calculating taxable income?
For UK freelancers: have you included Class 4 National Insurance in your tax reserve?
For VAT: are you using the correct formula for the direction (adding vs removing VAT)?
For US sales: do you know your nexus state obligations?
Have you verified the current tax rates and thresholds for this tax year?
For payment fees: have you decided whether to absorb fees or gross-up your pricing to recover them?
Frequently asked questions
What is the correct formula for removing VAT from a gross price?
To remove 20% VAT from a gross (VAT-inclusive) price, divide by 1.20 — not multiply by 0.80. Dividing by 1.20 gives the net price. VAT amount = gross - net. For example: £120 ÷ 1.20 = £100 net. VAT = £20. Multiplying by 0.80 gives £96, which is wrong. The CalcBix VAT calculator applies the correct formula for both adding and removing VAT.
How much should a UK freelancer set aside for tax?
A UK freelancer should set aside 25–35% of gross earnings depending on their income level. At £50,000–£80,000, expect combined income tax and Class 4 NICs of approximately 27–33% of taxable profit. Setting aside 30% of each invoice payment is a safe baseline. Reduce this by the proportion covered by allowable expenses. Use the freelancer tax estimate calculator with your expected annual profit for a more accurate figure.
Are salary tax calculators accurate?
Online salary calculators are accurate for the standard inputs: gross salary, personal allowance, standard income tax bands, and NI rates. They become inaccurate if you have: pension contributions reducing taxable pay, benefit-in-kind from an employer, student loan deductions, marriage allowance transfers, or income from multiple sources. Always verify your specific situation against your payslip or with an accountant.
How do payment processor fees affect my effective revenue?
Stripe at 2.9% + £0.30 per transaction means a £100 payment nets you £97.50. On a £25 transaction, the £0.30 fixed element makes the effective fee rate 4.1%. For high-volume low-value transactions, fee gross-up (pricing to recover the fee) is worth considering. The Stripe fee calculator shows the net amount and the gross-up price for any transaction value.