How to use the self-employment tax calculator
The calculator has two tools. SE tax works out self-employment tax on your profit. Quarterly estimate adds a federal income tax estimate and splits the total into four payments.
- Net self-employment profit. Business income minus business expenses, the figure on Schedule C line 31 (or your share of partnership earnings subject to SE tax). Add up all your businesses.
- W-2 wages. If you also have a job, enter your Social Security wages (box 3 of Form W-2). They use up part of the wage base and of the Additional Medicare threshold.
- Filing status. It sets the Additional Medicare threshold and, in the quarterly tool, the standard deduction and income tax brackets.
The SE tax tool shows each part of the tax, the deductible half and a table of the tax at profits from $20,000 to $300,000.
How self-employment tax is calculated
Social Security = 12.4% × smaller of (Net earnings, Wage base − W-2 wages)
Medicare = 2.9% × Net earnings
Self-employment tax = Social Security + MedicareThe 92.35% factor removes the "employer half" from the base, the way an employer's share of payroll tax is not part of an employee's wages. The 2026 Social Security wage base is $184,500. No SE tax is due if net earnings are under $400.
Deductible half = Self-employment tax ÷ 2The Additional Medicare threshold is $200,000 for single filers, $250,000 for married couples filing jointly and $125,000 for married filing separately. It is reported on Form 8959, has no employer half and is not part of the deductible half.
A worked example
A single freelancer has $85,000 of net profit and no other job. Net earnings are $78,497.50 (92.35% of profit).
The Social Security part is $9,733.69 and the Medicare part $2,276.43, so self-employment tax is $12,010.12, 14.1% of profit, or $1,000.84 a month. Earnings are far below the Additional Medicare threshold.
Half the tax, $6,005.06, is deductible in working out adjusted gross income. It lowers income tax, not the SE tax itself.
How the tax changes with profit
| Net profit (single) | Self-employment tax | Effective SE rate |
|---|---|---|
| $40,000 | $5,651.82 | 14.1% |
| $85,000 | $12,010.12 | 14.1% |
| $150,000 | $21,194.32 | 14.1% |
| $250,000 | $29,851.25 | 11.9% |
The rate is flat at about 14.1% of profit until net earnings reach the $184,500 wage base, which takes a profit of about $199,783. Above that, only the Medicare part keeps growing, so the effective rate falls: at $250,000 it is 11.9%, even with $277.88 of Additional Medicare tax.
Self-employment income on top of a job
A W-2 job and a side business share one Social Security wage base. Your employer has already withheld Social Security on your wages, so the SE tax only charges the 12.4% part on whatever room is left under the cap. The salary after tax calculator shows the payroll taxes on the job itself.
With $150,000 of W-2 wages and $100,000 of self-employment profit, only $34,500 of the $92,350.00 net earnings fits under the wage base. The Social Security part is $4,278.00, Medicare $2,678.15, and the combined income passes the $200,000 threshold, adding $381.15 of Additional Medicare tax. Total: $7,337.30, or 7.3% of the side profit.
Planning quarterly payments
No employer withholds tax from self-employment income, so the IRS expects estimated payments during the year. The Quarterly estimate tool adds SE tax to a federal income tax estimate: profit minus the deductible half of SE tax gives adjusted gross income, and the standard deduction comes off before the brackets apply.
On $85,000 of profit, income tax is about $8,548.89 on $62,895 of taxable income and SE tax is $12,010.12. Together that is $20,559.00, so each quarterly payment is about $5,139.75. Put differently, set aside $24.19 of every $100 of profit. At $40,000 the payment drops to $1,983.18; at $150,000 it rises to $10,846.25.
Many self-employed people also qualify for the qualified business income (QBI) deduction, which can deduct up to 20% of qualified business income from taxable income, subject to income limits and restrictions on some service businesses. It lowers income tax but not SE tax. The calculator leaves it out, so its income tax estimate errs on the high side. Contributions to a SEP IRA or solo 401(k) also lower income tax but not SE tax.
What this calculator does not include
- The QBI deduction, retirement plan contributions and the self-employed health insurance deduction, which reduce income tax.
- Other income of your household, such as a spouse’s wages or investment income, that changes your income tax bracket.
- Church employee income, farm income options and other special SE tax rules.
- State income tax beyond an optional flat rate, and local business taxes.
- Credits and safe-harbor amounts. Your actual required payments depend on last year’s tax as well.
For pricing your work so that these taxes are covered, see the freelance rate calculator.