Self-Employment Tax Calculator

How Self-Employment Tax Works

Self-employment tax is the way the IRS collects Social Security and Medicare contributions from individuals who work for themselves. When you are employed by a company, your employer pays half of these payroll taxes and you pay the other half through withholding. As a self-employed individual, you are responsible for both halves — the full 15.3% rate.

This tax applies to anyone who earns $400 or more in net self-employment income during the year. That includes sole proprietors, freelancers, independent contractors, single-member LLC owners, and general partners. Even if you also hold a W-2 job, any side income reported on Schedule C is subject to SE tax.

The 92.35% Multiplier

Before the tax rates are applied, your net self-employment earnings are multiplied by 92.35%. This adjustment mirrors the treatment that W-2 employees receive — traditional employees are not taxed on the employer portion of FICA. By reducing the taxable base, the IRS ensures parity between employed and self-employed workers. For example, $100,000 in net self-employment income becomes $92,350 for calculation purposes.

Social Security and Medicare Components

The 15.3% rate breaks down into two parts. Social Security tax is 12.4%, applied only to earnings up to the annual wage base — $168,600 for 2024. Medicare tax is 2.9%, applied to all earnings with no cap. High earners face an Additional Medicare Tax of 0.9% on income above $200,000 (single) or $250,000 (married filing jointly). Unlike the standard SE tax, this additional tax is not split between employer and employee portions.

The Employer-Half Deduction

One important benefit: you can deduct 50% of your self-employment tax when calculating your adjusted gross income. This is an above-the-line deduction on Form 1040, meaning you receive it whether or not you itemize. While it does not reduce the SE tax itself, it lowers your AGI, which can reduce your federal income tax and potentially qualify you for other tax benefits tied to AGI thresholds.

When to Use This Calculator

Use this calculator to estimate your annual self-employment tax liability before filing. It is especially useful during quarterly estimated tax planning — knowing your SE tax obligation helps you calculate accurate quarterly payments and avoid underpayment penalties. Pair it with our quarterly estimated tax calculator and LLC vs S-Corp calculator for a complete picture of your tax obligations.