What is the self-employment tax rate?

The combined rate is 15.3% — 12.4% for Social Security and 2.9% for Medicare. The Social Security part only applies up to the annual wage base; Medicare applies to all net earnings.

Why is only 92.35% of my profit taxed?

SE tax is charged on net earnings from self-employment, defined as 92.35% of net profit. That 0.9235 factor exists because employees do not pay SE tax on the employer-paid FICA share, and this approximates that adjustment.

Can I deduct any of the self-employment tax?

Yes. You can deduct one-half of your SE tax as an above-the-line adjustment to income on Form 1040. This reduces your income tax, though not the SE tax itself.

What is the Additional Medicare Tax?

An extra 0.9% Medicare tax applies to net earnings above $200,000 (single) or $250,000 (married filing jointly). This calculator adds it on top of the base 2.9% Medicare rate.

Does this replace income tax?

No. SE tax covers only Social Security and Medicare. You still owe federal (and often state) income tax on your business profit, calculated separately on your 1040.

US Self-Employment Tax Calculator

US self-employment tax is how sole proprietors, freelancers, and 1099 contractors fund Social Security and Medicare — the equivalent of the FICA taxes an employer and employee split. It is reported on Schedule SE and is separate from federal income tax. This calculator estimates the tax from your net business profit and shows the deduction you are entitled to.

How it works

The IRS Schedule SE calculation runs in these steps:

Multiply your net profit by 0.9235 to get net earnings from self-employment. (No SE tax is due if this is under $400.)
Apply 12.4% Social Security to net earnings up to the annual wage base ($168,600 for 2024, $176,100 for 2025).
Apply 2.9% Medicare to all net earnings — there is no Medicare wage cap.
Add 0.9% Additional Medicare Tax on net earnings above $200,000 (single) or $250,000 (married filing jointly).
Sum those amounts for total SE tax. You may deduct one-half of it as an above-the-line adjustment to income.

The combined base rate of 12.4% + 2.9% is the familiar 15.3% figure.

Example

A freelancer with $80,000 net profit in 2024:

Net earnings = 80,000 × 0.9235 = $73,880
Social Security = 73,880 × 12.4% = $9,161.12
Medicare = 73,880 × 2.9% = $2,142.52
Total SE tax = $11,303.64
Deductible half = $5,651.82

Notes

This is an estimate for planning and quarterly-payment budgeting. It does not account for W-2 wages that already used part of the Social Security wage base, church-employee income, or optional methods. Confirm figures with a tax professional or current IRS instructions before filing.