Self-Employment Tax Calculator
Estimates the self-employment tax owed by freelancers, contractors, and sole proprietors. Use it when filing Schedule SE or planning quarterly payments.
About this calculator
Self-employed individuals must pay both the employee and employer portions of FICA taxes, which cover Social Security and Medicare. The IRS lets you deduct half of self-employment tax before calculating your net earnings base, which results in an effective rate of 14.13% on net self-employment earnings: SE Tax = netEarnings × 0.1413. The standard combined FICA rate is 15.3% (12.4% Social Security + 2.9% Medicare), but the 0.9265 deduction adjustment brings the effective multiplier to 0.9265 × 0.153 ≈ 0.1413. This tax applies to net earnings above $400. High earners above $200,000 (single) may also owe an additional 0.9% Medicare surtax, not included here.
How to use
Suppose you are a freelance designer with net self-employment earnings of $60,000 for the year. Enter $60,000 into the Net Self-Employment Earnings field. The calculator applies: SE Tax = $60,000 × 0.1413 = $8,478. This $8,478 is your total self-employment tax. You may then deduct half of it ($4,239) from your gross income on Form 1040, reducing your income tax liability. Plan to set aside roughly 15% of each payment you receive to cover this obligation.
Frequently asked questions
How is self-employment tax different from income tax for freelancers?
Self-employment tax covers Social Security and Medicare contributions, which employees normally split with their employer. As a self-employed person, you pay both halves — 12.4% for Social Security and 2.9% for Medicare — totaling 15.3% before the adjustment. Income tax is a separate, additional obligation based on your taxable income after deductions. You owe both taxes, so it is critical to plan for each independently.
What net earnings amount triggers self-employment tax?
You owe self-employment tax if your net self-employment earnings are $400 or more in a tax year. Net earnings generally equal your gross self-employment income minus ordinary business deductions. Even if your total income is below the standard deduction threshold for income tax, the $400 SE tax trigger can still apply. Always track business expenses carefully to reduce your taxable net earnings.
Can I deduct self-employment tax when calculating my income taxes?
Yes — the IRS allows you to deduct 50% of your self-employment tax as an above-the-line deduction on Form 1040. This deduction does not require itemizing; it reduces your adjusted gross income directly. For example, if your SE tax is $8,478, you can deduct $4,239 from your income before calculating your income tax bracket. This partial deduction acknowledges that employers normally absorb their half of payroll taxes as a business expense.