Self-Employment Tax Calculator

Self-employment tax covers Social Security (12.4%) and Medicare (2.9%), totaling 15.3%. As an employee, your employer pays half and you pay half. When self-employed, you pay both halves. However, you can deduct half of your SE tax when calculating income tax, which helps offset this burden.

SE tax is calculated on 92.35% of your net self-employment income (income minus business expenses). Multiply that by 15.3% for incomes under the Social Security wage base ($176,100 in 2025). Above that, only the 2.9% Medicare portion applies to additional income.

Yes, if you expect to owe $1,000 or more in taxes. The IRS requires quarterly payments to avoid underpayment penalties. Due dates are April 15, June 15, September 15, and January 15. Missing payments can result in penalties even if you pay the full amount when filing.

Common deductions include: home office expenses, equipment and software, internet and phone bills (business portion), professional services, marketing costs, travel expenses, health insurance premiums (if self-employed), and retirement contributions (SEP IRA, Solo 401k).

Key strategies include: maximizing legitimate business deductions, contributing to a SEP IRA or Solo 401(k), considering S-Corp election if income exceeds ~$50k, and deducting health insurance premiums. An S-Corp can help split income between salary (subject to SE tax) and distributions (not subject to SE tax).

The Social Security wage base for 2025 is $176,100. This means you only pay the 12.4% Social Security portion of SE tax on the first $176,100 of net self-employment earnings. Income above this is only subject to the 2.9% Medicare tax (plus 0.9% additional Medicare tax if over $200k).

An extra 0.9% Medicare tax applies to self-employment income exceeding $200,000 (single) or $250,000 (married filing jointly). This is on top of the regular 2.9% Medicare tax, bringing the Medicare portion to 3.8% on high incomes.

Yes, you can deduct the employer-equivalent portion (half) of your self-employment tax when calculating your adjusted gross income. This reduces your income tax but does not reduce the SE tax itself. This deduction is taken directly on Form 1040, not on Schedule C.