Tax & BAS
Building a Financial Buffer as a Freelancer
How much cash reserve you need as a freelancer, why it's different from your tax savings, and how to build it.
Freelance income arrives in lumps. A buffer turns a quiet month from an emergency into a pause.
Not your tax savings account
30% of every payment. For tax, PAYG, GST. Don't touch it.
For income gaps, late payers, unexpected costs. Yours when you need it.
How much
Target: three months of personal expenses plus one to two months of business costs.
| Monthly personal | Monthly business | Buffer target |
|---|---|---|
| $3,000 | $500 | $9,500 |
| $5,000 | $1,000 | $16,000 |
| $8,000 | $1,500 | $25,500 |
The buffer removes desperation. When you're not scrambling to cover rent, you negotiate better, charge properly, and pick the right clients.
At 10% of gross, earning $100k/year adds ~$830/month. $5,000 in six months. Same-day transfers alongside your 30% tax split.
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