Self-Employment Tax Calculator

Calculate self-employment tax (Social Security + Medicare) for freelancers, independent contractors, and sole proprietors using 2024 rates.

Self-Employment Income

$

Revenue minus business expenses (Schedule C net profit)

Enter your net self-employment income and click Calculate to see your SE tax breakdown.

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Pro Tip

Consider forming an S-corporation if your net SE income exceeds $50,000-$60,000. You can pay yourself a reasonable salary (subject to FICA) and take the rest as distributions (exempt from SE tax).

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Understanding Self-Employment Tax

Self-employment tax is the equivalent of FICA taxes for people who work for themselves. While W-2 employees split Social Security and Medicare taxes with their employer, self-employed individuals pay both the employee and employer portions.

The combined SE tax rate is 15.3%: 12.4% for Social Security and 2.9% for Medicare. However, only 92.35% of net self-employment income is subject to the tax, reducing the effective rate. Additionally, you can deduct half of your SE tax when calculating income tax.

The Social Security portion (12.4%) applies only to the first $168,600 of net SE earnings for 2024. Medicare tax (2.9%) has no cap, and an additional 0.9% Medicare surtax applies to SE income over $200,000 (single) or $250,000 (married filing jointly).

Self-employment tax is calculated on Schedule SE and paid as part of your annual tax return. You are generally required to make quarterly estimated tax payments if you expect to owe $1,000 or more in total taxes.

Self-Employment Tax Formulas

SE Tax = (Net SE Income × 92.35%) × 15.3%

Where:

92.35% = Taxable base adjustment (equivalent to employer portion deduction)

12.4% = Social Security rate (on income up to $168,600)

2.9% = Medicare rate (on all SE income)

0.9% = Additional Medicare on SE income over $200,000

Deductible Half = 50% of SE tax is deductible on Form 1040

Example

Freelancer with $100,000 net self-employment income:

  • • Taxable base = $100,000 x 92.35% = $92,350
  • • Social Security = $92,350 x 12.4% = $11,451.40
  • • Medicare = $92,350 x 2.9% = $2,678.15
  • • Total SE tax = $14,129.55
  • • Deductible half = $7,064.78 (reduces income tax)

Frequently Asked Questions

Who pays self-employment tax?
Anyone with net self-employment income of $400 or more must pay SE tax. This includes freelancers, independent contractors, sole proprietors, and members of partnerships. It does not include S-corp owners who receive W-2 wages.
Why is only 92.35% of income taxed?
This adjustment mirrors the tax treatment of W-2 employees, who are not taxed on the employer's share of FICA. Multiplying by 92.35% is mathematically equivalent to a 7.65% deduction, matching what employers pay.
Can I deduct self-employment tax?
Yes, you can deduct half (50%) of your self-employment tax as an above-the-line deduction on Form 1040. This reduces your adjusted gross income (AGI) and thus your income tax, but not the SE tax itself.
Do I need to make quarterly payments?
Yes, if you expect to owe $1,000 or more in total taxes (income tax + SE tax). Quarterly estimated payments are due April 15, June 15, September 15, and January 15. Failure to pay quarterly may result in penalties.
How is SE tax different from income tax?
SE tax funds Social Security and Medicare (like FICA for employees). Income tax is separate and funds general government operations. You owe both. The deductible half of SE tax reduces your income tax, but they are calculated independently.