This page documents every calculation on the site, so you can check our work or reproduce it. All calculations run in your browser; nothing is sent to a server.
The APR method
Wherever we show an estimated APR, we use the actuarial method described in Regulation Z, Appendix J (12 CFR 1026). We find the periodic rate i that satisfies
money received = Σ paymentk ÷ (1 + i)tk
where tk is the time of payment k in unit periods, and multiply i by the number of unit periods in a year: 12 for monthly schedules, 52 for weekly, and 365 for daily schedules, where the unit period is one calendar day. Money received is the amount funded minus any fees deducted or paid upfront, which is why fees raise the APR.
The equation has no closed-form solution. We solve it by bisection to a precision well under $0.01 of present value. Commercial financing isn't covered by the Truth in Lending Act, so our APR is a comparison tool, not a legal disclosure.
Merchant cash advances
- Total payback = advance × factor rate. Money received = advance − upfront fees.
- Fixed schedules: payback ÷ number of payments, paid every weekday (Monday to Friday) or every 7 days after funding. US federal holidays are ignored.
- Holdback schedules: daily payment = monthly card sales × 12 ÷ 260 × holdback %. The number of payments is the payback ÷ daily payment, rounded up; the last payment is the remainder.
- Rule-of-thumb rate (shown for comparison) = (cost ÷ money received) × 365 ÷ days to repay.
Business loans
- Amortizing: payment = P × r ÷ (1 − (1 + r)−n), with r = annual rate ÷ payments per year.
- Flat interest: interest = P × rate × (n ÷ payments per year); payment = (P + interest) ÷ n.
- Total payback: payment = payback ÷ n.
- Fees added to the loan increase P; fees deducted upfront reduce money received. Total cost = total repaid − money received.
SBA 7(a) loans
- Guaranteed portion = 85% (loans ≤ $150,000) or 75% (larger), 50% for SBA Express, capped at $3,750,000.
- Upfront fee from the schedule for the SBA fiscal year of the application date, applied to the guaranteed portion, including the short-term (≤ 12 months) rate and any fee waiver for that year.
- Payment: standard monthly amortization at base rate + spread. APR counts the guaranty and packaging fees as costs whether deducted, paid in cash or financed.
- Maximum-rate check for Prime-based variable loans: Prime + 6.5% (≤ $50,000), + 6% (≤ $250,000), + 4.5% (≤ $350,000), + 3% (larger).
Equipment lease vs. buy
- All cash flows are discounted monthly at j = discount rate × (1 − tax rate) ÷ 12. Costs are positive.
- Buy: down payment + loan payments (+ any balance outstanding at the end of the lease term) − tax rate × (interest + depreciation) at each tax year-end − after-tax residual value.
- After-tax residual = residual − tax rate × (residual − remaining tax basis).
- FMV lease: lease payments − tax rate × payments deducted each tax year.
- $1-buyout lease: the implicit rate is solved from the payments and the $1 buyout, then the lease is treated as a financed purchase at that rate.
- Depreciation: Section 179 and 100% bonus deduct the full cost in year one; MACRS 5- and 7-year use the IRS Publication 946 half-year tables.
Self-employment tax
Self-employment (SE) tax is the combined employer-and-employee share of Social Security and Medicare, payable by sole proprietors and single-member LLCs on their net profit.
- Net earnings subject to SE tax = net profit × 0.9235. The 0.9235 factor approximates the employer-equivalent deduction (half of the combined SE rate).
- Social Security portion = min(net earnings, SS wage base) × 12.4%. The 2026 wage base is $184,500.
- Medicare portion = net earnings × 2.9% (no cap).
- Additional Medicare Tax = max(0, net earnings − threshold) × 0.9%. The threshold is $200,000 for single filers and head of household, $250,000 for married filing jointly. This threshold is statutory (IRC § 3101(b)(2)) and not inflation-adjusted.
- SE tax deduction: half of total SE tax is deductible from gross income before computing federal income tax.
Quarterly estimated tax safe-harbor
The IRS requires self-employed filers to prepay tax in four installments. The safe-harbor amount — the minimum that avoids an underpayment penalty — is the lesser of:
- 90% of the current year's estimated tax, computed from expected net profit after the SE tax deduction and standard deduction using 2026 federal brackets.
- 100% of the prior year's tax liability (line 24, Form 1040), or 110% if the prior year's adjusted gross income exceeded $150,000. This option is only available when a prior-year liability is entered; first-year filers use the 90% path.
The per-quarter payment is required annual payment ÷ 4. The amount due in a given quarter is the cumulative required amount minus payments already made, floored at zero. Underpayment-penalty risk is flagged when the year-to-date payments fall short of the cumulative required amount through the preceding quarter.
2026 due dates: Q1 April 15 · Q2 June 15 · Q3 September 15 · Q4 January 15 (2027). Dates that fall on a weekend or federal holiday shift to the next business day — confirm on IRS.gov before paying.
1099 vs W2 comparator
Contractor take-home = contract rate − business expenses − SE tax − federal income tax − state income tax − retirement contribution, where SE tax and federal income tax are computed on the net profit after the SE deduction and standard deduction. W2 take-home uses the employee-only FICA rates (6.2% SS + 1.45% Medicare, employer half excluded) instead of the full SE rate. The break-even contract rate is found by bisection: the rate at which contractor take-home equals W2 take-home plus the value of lost benefits.
Freelance rate
Required hourly rate = (target income + business expenses + self-funded benefits) ÷ (1 − tax buffer %) ÷ total billable hours per year, where total billable hours = (52 − weeks off) × billable hours per week. The tax buffer is a planning gross-up, not a tax calculation.
S-corp savings
Sole-proprietor SE tax is computed on the full net profit. S-corp payroll tax is the combined employer-and-employee FICA (same 15.3% rate) on the reasonable salary only — the distribution above the salary avoids FICA. The net saving is sole-prop SE tax minus S-corp payroll tax minus annual overhead (payroll service + additional accounting). The break-even profit level is found by bisection, holding the salary-to-profit ratio constant.
State income tax coverage (self-employed calculators)
State income tax is modeled for three groups of states:
| Group | States | Method |
|---|---|---|
| No income tax | AK, FL, NV, NH, SD, TN, TX, WA, WY | State tax = $0 |
| Flat rate (approximate) | AL, AR, AZ, CO, DE, GA, IA, ID, IL, IN, KS, KY, LA, MA, ME, MI, MO, MS, MT, NC, ND, NE, NM, OK, PA, RI, SC, UT, VA, WV | Taxable income × flat rate |
| Progressive brackets (approximate) | CA, CT, DC, HI, MD, MN, NJ, NY, OH, OR, VT, WI | Per-filing-status bracket tables using 2025 published rates |
All 50 states and DC are now modeled. Progressive bracket thresholds and flat-rate approximations use 2025 published figures — 2026 inflation adjustments are pending official announcements from each state DOR. All entries are marked unverified; results are estimates only.
2026 tax data sources
| Data | Source | Notes | Update cadence |
|---|---|---|---|
| 2026 federal income tax brackets and standard deductions | IRS Rev. Proc. 2025-32 | HOH brackets at 24% and above are historically identical to Single (confirmed in the 2026 fetch). The 10%/12%/22% HOH thresholds here are ESTIMATED by scaling the 2025 HOH thresholds (Rev. Proc. 2024-40) by the Single bracket's 2025->2026 inflation factor — they are NOT directly sourced from Rev. Proc. 2025-32's HOH table. | Each autumn (IRS inflation revenue procedure) |
| 2026 Social Security wage base ($184,500) | Social Security Administration | Social Security Administration 2026 wage base, $184,500 — corroborated by multiple secondary sources (ustax.tools, mjcpa.com), fetched 2026-09-25. Verify against ssa.gov's official 2026 fact sheet before production use. | Each October (SSA COLA announcement) |
| State income tax coverage | State revenue department statutes | PARTIAL — all 50 states + DC covered, but bracket thresholds use 2025 published rates pending 2026 announcements from each state DOR. Flat-rate approximations for states with simple top-rate structures. All entries unverified; check state DOR before relying on results. | As new states are added |
Rounding
Calculations keep full precision. Results are rounded only for display: currency to the cent (half away from zero) and rates to two decimal places.
Test cases
Every engine is tested against fixed cases computed independently. A selection:
| Inputs | Expected result |
|---|---|
| MCA: $50,000 × 1.35, 126 weekday payments | $535.71 per payment, 176 days, APR 131.49% |
| MCA: same, $1,500 fee deducted | APR 145.73% |
| MCA: 10% holdback on $60,000/month sales | $276.92/day, 244 payments, APR 67.87% |
| Loan: $100,000, 7.5%, 60 months, $2,000 fee | $2,003.79/month, APR 8.36% |
| Loan: $50,000, 12% flat, 52 weekly | $1,076.92/week, APR 22.71% |
| SBA: $1,500,000 (FY2026 schedule) | Guaranty $1,125,000, fee $39,687.50 |
| SBA: $500,000, 10.5%, 120 months, fee from proceeds | $6,746.75/month, APR 11.05% |
| Lease vs. buy: $100,000, 25% tax, Section 179, $25,000 residual | Buy $63,394.94, lease $73,676.28 |
| $1-buyout lease: $100,000, $2,100 × 60 in advance | Implicit rate 9.85% |
Data sources and update schedule
| Data | As of | Source | Checked | Updated |
|---|---|---|---|---|
| SBA 7(a) fee schedules (FY2026, FY2027) | 2026-10-20 | SBA 7(a) fee information notices by fiscal year (see each fiscalYears[].source) | Verified against primary source | Each October 1 (SBA fiscal year) |
| Prime rate | 2026-09-21 | Board of Governors of the Federal Reserve System, H.15 Bank Prime Loan Rate (FRED series DPRIME) | Verified against primary source | After each FOMC rate decision |
| Section 179 limits and MACRS tables | 2026-09-26 | IRS Rev. Proc. 2025-32 §4.24 (2026 §179 limits); OBBBA (P.L. 119-21) §70301/§70401; MACRS rates from IRS Publication 946, Table A-1 | Verified against primary source | Each autumn (IRS inflation revenue procedure) |
Each data file carries an expiry date. Our build checks fail if any file expires without an update, so stale fees or rates can't ship silently.
Corrections
If you find an error, please contact us with the page, your inputs and what you expected. We fix confirmed errors promptly and note material corrections in the changelog below.
Changelog
- 2026-10-02: Added four self-employed calculators (quarterly tax, 1099 vs W2, freelance rate, S-corp savings) using 2026 IRS brackets (Rev. Proc. 2025-32) and the 2026 SS wage base ($184,500). State tax modeled for 15 states; others pending. HOH bracket thresholds below 24% are estimated from 2025 values — not yet verified against the final published table.
- 2026-09-26: Launch versions of all four financing calculators. Added the SBA fiscal 2027 fee schedule (pending primary-source check) and verified the 2026 Section 179 limits against IRS Rev. Proc. 2025-32.