How is Schedule C net profit calculated?

Net profit is gross receipts minus cost of goods sold minus your total deductible business expenses. It appears on line 31 of Schedule C and flows to your Form 1040 as business income, where it is subject to both income tax and self-employment tax.

How much is self-employment tax?

Self-employment tax is 15.3% on net SE earnings — 12.4% Social Security up to the annual wage base ($176,100 for 2025) plus 2.9% uncapped Medicare. It is calculated on 92.35% of your net profit, and half of the resulting tax is deductible above the line.

What is the QBI deduction?

The Qualified Business Income deduction under Section 199A lets many self-employed people deduct up to 20% of their qualified business income. This tool estimates it as 20% of net profit less the deductible half of SE tax, before the taxable-income limit and any phase-outs.

What if my business runs a loss?

If expenses exceed income, your Schedule C shows a loss. There is no self-employment tax or QBI deduction on a loss, but the loss may offset other income on your 1040, subject to at-risk and passive-activity limitation rules.

Does this replace filing Schedule C and Schedule SE?

No. It is a planning estimate to help you understand your numbers and set aside cash for taxes. The actual forms involve additional lines, limits and elections, and the QBI calculation in particular has caps this tool deliberately simplifies.

US Schedule C Net Profit Calculator

The US Schedule C Net Profit Calculator turns your gross receipts and categorized expenses into a Schedule C net profit, then shows the two taxes that profit triggers for a sole proprietor or single-member LLC: self-employment (SE) tax and the impact of the 20% QBI deduction. It is built for US freelancers, gig workers and independent contractors who want to understand their real take-home before tax season.

How it works

Net profit is straightforward subtraction:

net profit = gross receipts − COGS − total deductible expenses

That figure (Schedule C line 31) is your business income. Self-employment tax then applies to 92.35% of it — the adjustment that mirrors the employer-side payroll deduction:

net SE earnings = net profit × 0.9235
SE tax = 12.4% (up to the $176,100 wage base) + 2.9% Medicare (no cap)

Half of the SE tax is deductible above the line, which also feeds the QBI deduction. This tool estimates QBI as 20% of net profit less that deductible half — a useful approximation before the taxable-income limit and specified-service phase-outs are applied.

Example and notes

Suppose you have $90,000 of receipts and $9,200 of expenses. Net profit is $80,800. Net SE earnings are $74,619; SE tax is about $11,416 (Social Security plus Medicare), of which roughly $5,708 is deductible. The simplified QBI deduction is about 20% of $75,092, or $15,018.

This is an estimate, not a substitute for filing Schedule C and Schedule SE. Vehicle expenses can use the standard mileage rate instead of actual costs, the home-office deduction has its own rules, and the QBI deduction is capped by taxable income — all simplified here. Set aside cash for the tax it shows, and confirm the final numbers with a tax professional.