Self-Employment Tax Calculator

• Calculates the 12.4% Social Security and 2.9% Medicare tax on 92.35% of net profit, plus the 0.9% Additional Medicare tax where it applies.
• Caps Social Security tax at the annual wage base and accounts for W-2 wages from another job.
• Shows the deductible half and estimates federal income tax, with a suggested quarterly set-aside.
• Rates and the wage base come from the site's tax data file, so they stay current with each tax year.

How to use this calculator

Enter your net profit from self-employment, the bottom line of Schedule C after business expenses, and choose your filing status. If you also have a W-2 job, open Advanced and enter your wages, because they use up part of the Social Security wage base. You can add other income and deductions to sharpen the income tax estimate.

How self-employment tax is calculated

Net earnings   = net profit x 92.35%
Social Security = 12.4% x net earnings, up to the wage base (less any W-2 wages)
Medicare       = 2.9% x net earnings
Additional Medicare = 0.9% x earnings above the threshold for your filing status
Deductible half = (Social Security + Medicare) / 2

The 92.35% factor exists because an employee's employer-paid half of payroll tax is not part of their wages. The self-employed person pays both halves, but the calculation takes the employer half out of the base to put them on equal footing.

A worked example

A freelancer with $75,000 of net profit and no other income has net earnings of $69,262. Social Security tax is $8,589 and Medicare tax is $2,009, so self-employment tax is $10,597. Half of that, $5,299, is deductible when working out income tax. The calculator estimates federal income tax of about $4,898, bringing total federal tax to $15,495, or about $3,874 per quarter.

At $40,000 of profit the self-employment tax is $5,652, about 14.1% of profit.

The deduction for half of the tax

You can deduct half of your self-employment tax from your income when you work out income tax. It is an adjustment to income, so you get it whether you itemize or not. It does not reduce the self-employment tax itself. The 0.9% Additional Medicare tax is not part of the deduction.

Why quarterly payments

Nobody withholds tax from self-employment income, so the IRS expects estimated payments during the year, generally in April, June, September and January. Paying too little can bring an underpayment penalty. The quarterly amount in this calculator is total federal tax divided by four, which is a planning figure rather than a bill. Our Freelancer Quarterly Estimated Tax Calculator models the safe-harbor rules in more detail.

Assumptions and limitations

• Federal only. State and local income tax are not included.
• Income tax is simplified. It uses the standard deduction and a simplified qualified business income deduction, with no credits.
• W-2 wages. They are treated as already subject to Social Security tax up to the wage base.
• Net earnings under $400. Self-employment tax generally applies only when net earnings reach $400.

Common mistakes

Applying 15.3% to all of your profit. The tax is on 92.35% of profit, and Social Security stops at the wage base.

Ignoring W-2 wages. If you have a job and a side business, your wages count first against the wage base.

Forgetting it on top of income tax. Self-employment tax is separate from, and added to, income tax.

Skipping quarterly payments. A large bill in April can come with a penalty.

Frequently asked questions