Self-Employment Tax Calculator

Self-employment tax is the 15.3% tax (12.4% Social Security + 2.9% Medicare) paid by self-employed individuals who don't have an employer withholding payroll taxes. When you work for an employer, they pay half of these taxes on your behalf. When you're self-employed, you pay both portions. It applies to net earnings from self-employment above $400. The IRS first multiplies your net earnings by 92.35% (to account for the employer-equivalent deduction), then applies the 15.3% rate.

Multiply your net self-employment income by 0.9235 to get your SE net earnings (this accounts for the employer deduction). Then multiply by 15.3%: 12.4% for Social Security and 2.9% for Medicare. For the Social Security portion, apply the 12.4% rate only up to the $176,100 Social Security wage base in 2025 — income above that threshold is only subject to the 2.9% Medicare tax. If your combined income exceeds $200,000 (single) or $250,000 (married filing jointly), an additional 0.9% Medicare tax also applies on the excess.

Yes. You can deduct 50% of your total self-employment tax from your gross income as an above-the-line deduction on Schedule 1 of Form 1040. This deduction reduces your adjusted gross income (AGI) and therefore your federal (and state) income tax. You do not need to itemize to claim it — it applies even if you take the standard deduction. For example, if your SE tax is $12,000, you deduct $6,000 from your gross income before calculating federal income tax.

A common rule of thumb is 25–30% of net income for most self-employed individuals in lower-tax states. Higher earners or those in high-tax states (California, New York, Oregon) may need to set aside 35–40%. This covers both self-employment tax (15.3% on net earnings before the standard deduction) and federal income tax. The safest approach is to use a tax calculator each quarter based on your actual income to determine your estimated payment amount.

The 2025 quarterly estimated tax due dates are: Q1 — April 15, Q2 — June 16, Q3 — September 15, and Q4 — January 15, 2026. Self-employed individuals generally must pay estimated taxes if they expect to owe $1,000 or more for the year. Underpaying estimated taxes can result in IRS underpayment penalties. A safe-harbor rule lets you avoid penalties by paying 100% of your prior year's tax (110% if prior-year AGI exceeded $150,000), regardless of what you actually owe for the current year.

A SEP-IRA allows contributions of up to 25% of net self-employment income (maximum $70,000 in 2025). A Solo 401(k) allows up to $23,500 in employee contributions plus an employer contribution up to 25% of net SE income. A SIMPLE IRA allows up to $16,500 in employee contributions. Importantly, these retirement contributions reduce your federal and state income tax but do not reduce your self-employment tax itself — SE tax is calculated on net earnings before retirement plan deductions. Still, the income tax savings are substantial for high earners.