Self-Employment Tax Calculator
Updated · By the CalculatorDash editorial team · How we check our maths
Quick answer
Self-employment tax is 15.3% on 92.35% of your net profit: 12.4% Social Security (up to the yearly wage base) plus 2.9% Medicare. On $80,000 of profit that is about $11,300. Half of it is deductible, and with a 12% income-tax rate on the rest you'd set aside roughly $5,060 per quarter.
How this calculator works
Employees split Social Security and Medicare with their employer: each pays 7.65%. When you work for yourself you are both, so you pay the full 15.3% as self-employment (SE) tax on top of income tax. It applies once your net SE profit for the year is $400 or more.
The tax is calculated on 92.35% of your net profit, which mirrors the fact that employees don't pay payroll tax on the employer's half. Social Security's 12.4% stops once your combined wages and SE earnings reach the yearly wage base; Medicare's 2.9% has no cap, and an extra 0.9% applies to earnings above $200,000 for single filers.
Half of your SE tax is an above-the-line deduction, which lowers your income tax. Because nothing is withheld from freelance income, the IRS expects estimated payments four times a year, generally in April, June, September and January, to avoid underpayment penalties.
The formula
- SE earnings
- net profit × 92.35%
- Social Security
- 12.4% × the lower of SE earnings and (wage base − W-2 wages)
- Medicare
- 2.9% × SE earnings, plus 0.9% above the threshold
- Deduction
- half of SE tax, subtracted from income before income tax
Worked example
$80,000 × 92.35% = $73,880 of SE earnings. Social Security is $9,161 and Medicare $2,143, so SE tax is about $11,304. Half ($5,652) is deductible, leaving $74,348 taxed at 12% ($8,922). Together that is about $20,226 for the year, or $5,056 a quarter.
Tips
- 01Move 25–30% of every client payment into a separate tax account the day it arrives.
- 02Track every legitimate business expense; each dollar of expense saves SE tax as well as income tax.
- 03Paying 100% of last year's total tax in estimates (110% at higher incomes) generally protects you from penalties.
Frequently asked questions
What is the self-employment tax rate?
15.3%: 12.4% for Social Security up to the wage base and 2.9% for Medicare, applied to 92.35% of net profit.
Do I pay self-employment tax and income tax?
Yes. SE tax replaces payroll tax; income tax is separate. Half of SE tax is deductible against income.
When are quarterly estimated taxes due?
Usually 15 April, 15 June, 15 September and 15 January, moved to the next business day when they fall on a weekend or holiday.
Can an S corporation lower self-employment tax?
Possibly. Owners take a reasonable salary subject to payroll tax and the remaining profit as distributions, but there are extra costs and rules. Ask a tax professional.
Sources for the default values
Defaults are typical figures from these sources; change any value to match your situation.