Self-Employment Tax Calculator

Self-employment tax exists because when you're a W-2 employee, your employer pays half of your Social Security and Medicare taxes. As a freelancer, sole proprietor, or independent contractor, you pay both halves — 15.3% in total on net earnings up to the Social Security wage base.

How SE tax is computed

Take net self-employment income (gross minus business expenses), multiply by 92.35% (this accounts for the employer-side deduction). Apply 12.4% Social Security up to $168,600 (the 2024 wage base) and 2.9% Medicare on the entire amount. High earners pay an extra 0.9% Medicare above $200k single / $250k joint.

The half-SE-tax deduction

The IRS lets you deduct half of your SE tax from your income before calculating federal income tax. This reduces your taxable income and federal liability, partially offsetting the SE burden.

Quarterly estimated payments

The U.S. tax system is pay-as-you-go. If you'll owe $1,000+ at tax time, the IRS expects four estimated payments throughout the year — April 15, June 15, September 15, and the following January 15. Missing them triggers underpayment penalties even if you pay in full by April.

Maximizing deductions

Track every legitimate business expense: home office (simplified $5/sq ft up to 300 sq ft), health insurance premiums (above-the-line deduction), retirement contributions (SEP-IRA or Solo 401(k) can shelter tens of thousands), mileage (67¢/mile in 2024), software, equipment, and education. Good bookkeeping is the highest-ROI activity for a self-employed person.