A cash-management method where every incoming payment is allocated by percentage to purpose-built buckets before any spending — typically tax, savings/profit, operating expenses, and owner pay — instead of the usual "spend, then see what is left." For solo freelancers it collapses to the four buckets in this splitter. The behavioral insight: money in a separate account is psychologically spent already, so the tax bill stops competing with lifestyle.

Start with 25 / 10 / 5 / 60 (tax / savings / reinvestment / pay) and adjust with evidence: raise the tax % if the quarterly calculator says you owe more; raise savings % until your emergency fund hits its target, then redirect it; raise reinvestment % when growth (not survival) is the goal. There is no universal correct split — only the split that matches your tax reality and goals.

25–30% of profit covers most US freelancers' combined income + self-employment tax, but the real number depends on income level, state, and deductions — at $40k profit 20% may suffice; at $150k in California, 35%+ is realistic. Run your numbers through the effective tax rate calculator once a year and set the tax bucket to that effective rate plus a 2–3 point cushion. Under-reserving is the #1 cause of freelancer tax panic.

Yes — it is the load-bearing part of the method. Mental accounting ("I'll remember $1,250 of this is for taxes") fails under every behavioral study ever run on the topic. Separate free checking/savings buckets — most online banks offer them at no cost — turn the allocation into a physical fact. Automate the transfers if your bank allows rules; the best system is the one that runs while you sleep.

Anything that raises future earning power: courses and certifications, better tools and hardware, portfolio and website work, marketing and ads, a bookkeeper or VA that buys back your hours, conference travel. The 5% default is a floor, not a ceiling — freelancers in growth mode often run 10–15%. If the bucket sits unspent for quarters, either spend it deliberately or reallocate it; idle reinvestment money is just savings with a fancier name.

Either, consistently. Splitting gross (every invoice) is simpler and behaviorally stronger — the habit triggers on every payment. Splitting profit (after direct project costs) is more precise for businesses with significant cost of goods sold. Pick one, document it, and size your percentages accordingly: a 25% tax bucket on gross is very different from 25% on profit. Most solo service freelancers split gross.

The splitter flags it and prorates rather than silently dropping the difference — because totals of 105% mean you planned to spend the same dollar twice, and totals of 90% mean 10% evaporates into lifestyle. Fix the inputs until the total reads exactly 100%. Common culprit: raising "pay yourself" without lowering another bucket.

Beautifully: the tax bucket is your quarterly payment fund. Each quarter, pay the IRS from the tax-reserve account — the money was never yours to spend, so the payment is painless. Size the bucket from the quarterly estimated tax calculator, and if you underpay two quarters running, raise the percentage; the penalty calculator shows what underpayment costs.

After direct project expenses, before lifestyle spending. If a $5,000 invoice required $800 in subcontractor or material costs, split the remaining $4,200 — tax is owed on profit, not revenue, so the tax bucket should reflect that. What you should not do is subtract rent, groceries, or personal spending first; the whole point of the pay-yourself bucket is that personal spending lives inside it. Gross-to-split is the most common beginner error and the fastest way to underfund the tax reserve.

That is exactly what it is for. Percentage-based splitting handles a $800 invoice and a $18,000 invoice identically — the discipline scales automatically, unlike fixed-amount budgets that break on variable income. In dry months the dollar amounts shrink but the ratios hold, which keeps the tax reserve funded proportionally instead of "pausing" it (the habit that creates April surprises).

Add a fifth bucket: operating expenses / team pay, taken off the top before the four-way split. Example: a $10,000 project with $3,000 in subcontractor costs → split the remaining $7,000 at your percentages. Never run team costs through "pay yourself" — co-mingling contractor pay with your salary is how agencies accidentally spend their payroll. The splitter's four buckets assume solo economics; with a team, the order is: pay the team first, then split what remains.