Self-Employment Tax Calculator
When you work for yourself you cover both halves of Social Security and Medicare, which surprises many new freelancers. Enter your net profit to see your estimated self-employment tax and the part you can deduct.
How this math works
Self-employment tax is 15.3 percent, made up of 12.4 percent for Social Security up to the annual wage base plus 2.9 percent for Medicare, and it is charged on 92.35 percent of your net profit. The calculator applies that rate and shows the total.
It also shows the deductible half of the tax, which you can subtract when figuring your income tax. Plan to set aside this amount along with your income tax for quarterly estimated payments.
Common questions
Why is only 92.35 percent of profit taxed?
The law lets you exclude a portion of net profit roughly equal to the employer share an employee would not pay, so the tax is figured on 92.35 percent rather than the full amount.
Is self-employment tax on top of income tax?
Yes. Self-employment tax covers Social Security and Medicare and is separate from federal income tax. You generally owe both, which is why setting money aside matters.
What are quarterly estimated payments?
Because no employer withholds for you, the system expects you to send tax payments four times a year. Setting aside your self-employment tax plus income tax helps you cover them on time.
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