How to use the self employment tax calculator
- Enter your net profit for the year: income from self-employment minus business expenses.
- If you also had a job, enter your W-2 wages. They use up part of the Social Security limit.
- Open the advanced options to check the Social Security wage base, the rates and the minimum earnings. Change them if they differ for your year.
- Read the self-employment tax, the Social Security and Medicare parts and the deductible half.
Formula
Net earnings = net profit x 92.35%
Social Security = smaller of (net earnings, wage base - W-2 wages) x 12.4%
Medicare = net earnings x 2.9%, with no cap
Self-employment tax = Social Security + Medicare; deductible half = tax / 2
The 92.35 percent factor reflects that an employee's share of payroll tax is not part of wages, so it puts you on a similar footing. No tax is owed when net earnings are below the minimum, which is $400. Amounts are rounded to the cent.
Worked example
A freelancer has $80,000 of net profit. Net earnings are 80,000 x 0.9235 = $73,880. Social Security is 73,880 x 12.4% = $9,161.12 and Medicare is 73,880 x 2.9% = $2,142.52.
Self-employment tax is $11,303.64, about 14.1 percent of profit, and half of it, $5,651.82, is deductible when figuring adjusted gross income.
With $250,000 of profit, the Social Security part is capped at the wage base of $184,500 x 12.4% = $22,878.00, and Medicare is still 2.9% of $230,875, or $6,695.38.
What self-employment tax is
Employees split Social Security and Medicare taxes with their employer. People who work for themselves pay both halves, which is why the combined rate is 15.3 percent, made up of 12.4 percent for Social Security and 2.9 percent for Medicare. The IRS describes the rates, the 92.35 percent factor, the $400 threshold and the deduction of half the tax on its self-employment tax page.
This tax is separate from income tax. You pay it on net profit even when your income is low enough that you owe no income tax, as long as net earnings reach the minimum.
Why some numbers can be edited
The Social Security wage base changes every year, and the rates have changed over time, so they are shown as editable inputs.
- The default wage base of $184,500 is the 2026 figure announced by the Social Security Administration. Check ssa.gov for the current value and change it for another year.
- The 12.4 percent and 2.9 percent rates and the 92.35 percent factor match the IRS description at the time of writing.
- High earners may owe an Additional Medicare Tax of 0.9 percent, which is not included here.
- Keep records of expenses. Net profit is what the tax is based on, so every legitimate deduction matters.
Assumptions and limits
- The tax rates, the 92.35% factor and the $400 minimum are defaults you can change. They follow the IRS description but you should confirm them for your year.
- The Social Security wage base default of $184,500 is the 2026 figure from the Social Security Administration and was not confirmed against the agency's website while this page was written.
- Income tax, state taxes, the qualified business income deduction and the Additional Medicare Tax are not modeled.
- This is an estimate for planning and not tax advice. Check your return with a tax professional.
Frequently asked questions
How much is self-employment tax?
It is 15.3 percent of 92.35 percent of net profit, up to the Social Security wage base, and 2.9 percent beyond it. On $80,000 of profit it is about $11,304.
Why is self-employment tax 92.35 percent of profit?
The factor puts self-employed people on a similar footing to employees, whose employer share of payroll tax is not counted in their wages. You multiply net profit by 92.35 percent first, then apply the rates.
Can I deduct part of self-employment tax?
Yes. Half of the tax can be deducted when figuring adjusted gross income, which lowers income tax. The calculator shows that amount. It does not lower the self-employment tax itself.
Do I owe the tax if I made a loss or very little?
No tax is owed on a loss, and none is owed when net earnings are below $400. The tool shows a note when this applies.