Self-Employment Tax Calculator
Calculate US self-employment tax from net profit — the Social Security and Medicare portions, the deductible half, and what to set aside.
How to use this calculator
- 1Enter your net profit — business income after expenses, not gross revenue.
- 2Add any W-2 wages from employment, which use up part of the Social Security wage base before your self-employment income does.
- 3Set the tax year and filing status, then use the quarterly figure as a floor for what to set aside — income tax comes on top.
How the calculation works
Net earnings = net profit × 92.35%. SE tax = 12.4% × min(net earnings, wage base − W-2 wages) + 2.9% × net earnings- 92.35%
- Schedule SE line 4a — the employer-equivalent share removed before the tax is figured
- 12.4%
- Social Security, capped at the annual wage base
- 2.9%
- Medicare, with no cap
- Wage base
- $184,500 for 2026, $176,100 for 2025
The 15.3% headline rate is 12.4% Social Security plus 2.9% Medicare — the combined employee and employer shares, both of which a self-employed person pays because they are both.
The 92.35% factor is not a discount. An employee's FICA is charged on their wage while the employer separately pays its 7.65% share on top, untaxed to the employee. Multiplying by (1 − 0.0765) puts the self-employed on the same footing before the 15.3% is applied.
Half the resulting tax is deductible against income tax, mirroring the fact that an employer deducts its share as a business expense. The Additional Medicare Tax has no employer counterpart and is not deductible.
Worked example
$80,000 of net profit, no W-2 wages, 2026
- 1.Net earnings: $80,000 × 92.35% = $73,880.
- 2.Social Security: $73,880 is well below the $184,500 wage base, so all of it is taxed at 12.4% = $9,161.12.
- 3.Medicare: $73,880 × 2.9% = $2,142.52. No cap applies.
- 4.Total SE tax: $9,161.12 + $2,142.52 = $11,303.64 — about 14.13% of the original profit, not the headline 15.3%, because of the 92.35% adjustment.
- 5.Half of that, $5,651.82, is deductible against income tax.
Result: $11,303.64 in SE tax, with $5,651.82 deductible
Why the self-employed pay both halves
An employee sees 7.65% taken out of each paycheck for Social Security and Medicare, and their employer quietly pays a matching 7.65% that never appears on the pay stub. Someone self-employed is both parties to that arrangement, so they owe the full 15.3% themselves. This is the single biggest tax surprise for people leaving employment for freelance or contract work: it is not an additional tax on top of what employees pay, but it is a visible cost that was previously hidden.
Two provisions soften it. Only 92.35% of net profit is subject to the tax, which mirrors the fact that an employee's FICA is not charged on the employer's share. And half the resulting tax is deductible against income tax, mirroring the employer's ability to deduct its share as a business expense. Together these mean the effective bite on profit is closer to 14.1% than 15.3%.
The two components behave differently
Social Security and Medicare are bundled into one rate but follow different rules.
- Social Security, 12.4% — capped at an annual wage base that rises most years with average wages. Earnings above it pay nothing further, which is why very high earners see their marginal SE rate drop sharply partway through the year.
- Medicare, 2.9% — uncapped. It applies to every dollar of net earnings no matter how high, which is why the marginal rate never falls to zero.
- Additional Medicare, 0.9% — added above $200,000 for single filers and $250,000 for joint filers. Unlike the other two it has no employer counterpart, is not halved, and is not deductible. Its thresholds are set in statute and have never been indexed for inflation, so it reaches more people every year in real terms.
W-2 wages and the shared wage base
Someone with both a job and a side business does not get two separate Social Security wage bases — there is one, shared. Wages are counted first, and only the remainder is available for self-employment earnings. A person earning $150,000 in wages against a $184,500 base has just $34,500 of room left, so most of their self-employment income escapes the 12.4% entirely while still paying the uncapped 2.9%.
This produces a counterintuitive result worth planning around: the same $30,000 of freelance profit can carry very different SE tax depending on whether it sits alongside a large salary or stands alone.
Quarterly payments, and what the estimate leaves out
Self-employment tax is not withheld by anyone, so the IRS generally expects it paid across four estimated instalments during the year rather than in a lump sum at filing. Missing those can trigger an underpayment penalty even when the full amount is eventually paid.
The figure this calculator produces is self-employment tax only. Federal income tax, and state income tax where it applies, are separate and stack on top — which is why the common rule of thumb is to set aside 25–30% of net profit rather than the roughly 14% that SE tax alone represents.
What this assumes, and where it stops
Assumptions
- Net profit is entered after all deductible business expenses — the Schedule C bottom line, not gross revenue.
- All self-employment income is from a trade or business subject to SE tax. Some income types are excluded, including most rental income, capital gains and certain partnership distributions.
- The taxpayer is a US person filing a US return. This calculator does not model any other jurisdiction.
Limitations
- Calculates self-employment tax only. Federal and state income tax are separate and additional — this is not a full tax estimate.
- Does not model the qualified business income (QBI) deduction, retirement plan contributions, or the self-employed health insurance deduction, all of which affect income tax but not SE tax itself.
- Assumes a sole proprietorship or single-member LLC. An S-corporation election changes the calculation substantially by splitting income between wages and distributions.
- The optional farm and non-farm methods on Schedule SE, used by low-income filers to preserve Social Security credits, are not modelled.
Common questions
Why is my effective rate about 14.1% rather than 15.3%?
Because the 15.3% is applied to 92.35% of your profit, not to all of it. 0.9235 × 15.3% = 14.13%, which is the true rate against net profit. The reduction exists so the self-employed are not taxed on the portion an employee would never have been taxed on — the employer's share of FICA.
Do I owe self-employment tax if I already pay FICA at a job?
Yes for Medicare, and possibly for Social Security. Medicare has no cap, so its 2.9% applies to self-employment earnings regardless of your wages. Social Security shares a single annual wage base across both — your wages count first, and only the remaining room is taxed on self-employment income.
When is no self-employment tax owed at all?
When net earnings from self-employment are under $400 for the year. Below that threshold no SE tax is due and Schedule SE is generally not required — though the income can still be subject to income tax, which is a separate matter.
Sources
- Topic no. 751, Social Security and Medicare withholding rates — US Internal Revenue Service
- Instructions for Schedule SE (Form 1040), Self-Employment Tax — US Internal Revenue Service
- Self-employment tax (Social Security and Medicare taxes) — US Internal Revenue Service
Formula and content last reviewed on .
Results are estimates for information only, not professional advice.
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