Business
Self-Employment Tax Calculator
Estimate your Social Security and Medicare taxes for 1099 income
FAQs
What is self-employment tax?
Self-employment tax consists of Social Security and Medicare taxes primarily for individuals who work for themselves. It is similar to the FICA taxes withheld from the pay of most wage earners.
What is the current self-employment tax rate?
The self-employment tax rate is 15.3%. This includes 12.4% for Social Security (up to a certain income limit) and 2.9% for Medicare on all net earnings.
How is self-employment tax calculated?
It is typically calculated on 92.35% of your net earnings from self-employment. Our calculator applies this rule automatically to give you an accurate estimate.
When do I need to pay self-employment tax?
If you expect to owe $1,000 or more in taxes, you generally must make quarterly estimated tax payments using Form 1040-ES.
How to Use the Self-Employment Tax Calculator
This calculator helps you estimate the mandatory Social Security and Medicare taxes you owe as a self-employed person in the US. It's essential for budgeting for quarterly estimated payments.
- Enter your total net annual earnings (Gross income minus business expenses).
- Review the calculated Social Security (12.4%) and Medicare (2.9%) portions.
- See your total tax obligation and effective tax rate.
- Check the suggested quarterly payment to help with IRS Form 1040-ES.
How SE Tax is Calculated
The IRS uses a specific multi-step formula to calculate self-employment tax.
Taxable Earnings Base
The IRS only taxes 92.35% of your net earnings, effectively giving you a deduction for the employer portion of the tax.
Example:
Input: $100,000 net earnings
Calculation: $100,000 × 0.9235
Result: $92,350 taxable amount
Combined SE Tax Rate
12.4% for Social Security + 2.9% for Medicare = 15.3% total.
Example:
Input: $92,350 taxable amount
Calculation: $92,350 × 0.153
Result: $14,130 total SE tax
SE Tax Planning Scenarios
Useful for different stages of business growth.
Quarterly Estimated Payments
Use this every quarter to ensure you are setting aside enough to cover your SE tax obligation and avoid IRS penalties.
Entity Selection (S-Corp vs LLC)
Compare your SE tax burden as a sole member LLC vs. potentially lower SE taxes in an S-Corp structure.
Self-Employment Tax Tips
Tips
- You can deduct half of your self-employment tax from your gross income when calculating your adjusted gross income (AGI).
- The Social Security portion is only applied up to a certain wage base ($168,600 for 2024).
- Earnings over $200,000 (single) or $250,000 (married) are subject to an additional 0.9% Medicare tax.
- Always keep a separate bank account for tax reserves to avoid spending your tax money.
Common Mistakes to Avoid
- Forgetting that SE tax is in addition to federal and state income tax.
- Not accounting for the 92.35% multiplier, leading to over-estimating taxes.
- Missing quarterly deadlines, which results in interest and penalties from the IRS.