Should I set aside tax before or after I pay myself?

Before. Move the tax share to a separate account the day each payment lands, then decide what you can spend from the rest. Tax on money you have already received is a bill with a due date, even though it is still sitting in your account.

How big should my buffer be with irregular income?

Three months of lean spending is the floor, and six months is where a slow quarter stops being an emergency. Lean spending means what you would still pay with no income: housing, food, insurance, debt payments, utilities and the software your work needs.

I already use QuickBooks or Keeper. Why can I still not answer this?

Bookkeeping and tax apps record what already happened: categorized transactions, deductions and a tax estimate. Safe to spend looks forward, and it also needs your upcoming bills and the buffer you have chosen. You can keep either app for books and filing and work this number out separately, by hand with the formula above or with a planning tool that sits alongside them.

How much can I safely spend as a freelancer?

Q: How much can I safely spend as a freelancer?

Take the cash in your accounts and subtract three things: tax you already owe on income you have received, bills due before your next reliable payment, and a buffer of at least three months of lean spending. What is left is safe to spend. If the result is negative, the honest answer for now is nothing beyond your bills.

By FreelanceCFO. Reviewed 10 November 2026.

Short answer

Safe to spend is the cash in your accounts, minus tax you already owe on income you have received, minus bills due before your next reliable payment, minus a buffer of at least three months of lean spending. Whatever is left is yours to spend or save. If it is negative, nothing beyond your bills is safe yet.

A bank balance is the wrong number to spend from when your income arrives in lumps. Part of it belongs to the IRS, part of it is next month's rent, and part of it is the only thing standing between you and a slow quarter. The balance looks biggest right after a good month, which is exactly when it is easiest to overspend.

The formula

Safe to spend =
  cash in checking and savings
  - tax owed on income already received
  - bills due before your next reliable payment
  - buffer (months you want covered x lean monthly spending)

Do it in that order. Tax comes off first because it is the one bill that does not send a reminder until it is late.

Worked example

Cash in checking and savings:            $26,000

Received this quarter, tax not yet paid: $15,000
Set-aside rate (example):                30%
Tax owed on it:                          $4,500

Bills due in the next 30 days:           $4,200

Lean monthly spending:                   $4,200
Buffer, 3 months:                        $12,600

Safe to spend:  26,000 - 4,500 - 4,200 - 12,600 = $4,700

The balance says $26,000. The real answer is $4,700. The 30% here is the example rate from the tax set-aside guide; your own rate depends on your income and state, and the tax set-aside calculator works it out for a single payment.

When a payment lands

Client pays an invoice:       $9,000
Move to tax account (30%):    $2,700
Added to safe to spend:       $6,300

New safe to spend:            4,700 + 6,300 = $11,000

Only the after-tax part of a payment ever counts. If you move the tax share out the day the money arrives, the number left in your main account is much closer to the truth.

What each line means

Cash is money you could use this month. Leave out retirement accounts and unpaid invoices: an invoice is safe to spend when it has been paid.
Tax owed is your set-aside rate times the profit you have received so far this year, minus the estimated payments and withholding you have already made. Count the whole year, not only the latest quarter: a payment that was too small leaves tax still owed on earlier income. If you have not been setting anything aside, start with how much to set aside.
Bills due are the fixed costs between now and the next payment you would bet on, not the next one you hope for.
Buffer is your runway floor. Three months of lean spending is the minimum, six is comfortable. The runway guide covers how to choose it.

If the number is negative

That does not mean you are in trouble. It means your buffer is not full yet, so new money goes to the buffer before it goes anywhere else. Three things move it fastest:

Collect what you are already owed. What to send when a client is 60 days late.
Pay yourself a fixed amount each month, set at what a slow month could support, and let good months fill the buffer.
Check how long your cash lasts today with the runway calculator, so you know how far the floor is.

Why your bookkeeping app does not show this

If you use QuickBooks or Keeper, your books can be perfectly clean and you can still not know what is safe to spend. That is not a flaw in those tools. They record what already happened: categorized transactions, deductions, a tax estimate, and in Keeper's case the return itself. Safe to spend is a forward-looking number, and it needs two inputs no ledger holds: the bills coming next and the buffer you have decided to keep.

So this is a layer on top of your books, not a replacement for them. Keep the tool that does your bookkeeping or filing, and work this number out next to it. See FreelanceCFO vs QuickBooks Solopreneur and FreelanceCFO vs Keeper for where each one stops.

FreelanceCFO keeps the inputs to this number current: your runway, your quarterly tax set-aside and who still owes you money, on one screen. Free to start, no credit card.

Start free

FreelanceCFO does not replace QuickBooks or Keeper and does not file your taxes. It works out runway from your real balance and average spending, and estimates each quarter's tax from your actual income, so the two largest subtractions above are already done.

Sources

Checked on 10 November 2026. The example figures are illustrations, not tax advice; follow the links for the method behind each one.