Self-Employment Tax Calculator
Self-employed individuals, freelancers, and independent contractors must pay self-employment (SE) tax to fund Social Security and Medicare, since they have no employer to share the burden. The SE tax rate is 15.3% (12.4% Social Security plus 2.9% Medicare), but it applies to 92.35% of net self-employment earnings, not 100%, to account for the employer-equivalent half. The Social Security portion is capped at the 2025 wage base of $176,100. You can then deduct half of the total SE tax as an above-the-line adjustment on your Form 1040, reducing your taxable income. This calculator computes your SE tax and deductible amount from net self-employment income.
Self-employment tax formula
SE earnings = net income * 0.9235
SS tax = min(SE earnings, $176,100) * 0.124
Medicare tax = SE earnings * 0.029
Total SE tax = SS tax + Medicare tax
Deductible half = Total SE tax * 0.5
The 0.9235 multiplier equals 1 minus 0.0765 (the employer share of FICA), which ensures self-employed taxpayers are taxed consistently with employees. The Social Security portion is capped at the 2025 wage base of $176,100.
Self-employment tax explained
- Self-employment tax is reported on Schedule SE, which is attached to Form 1040.
- Half of the SE tax is deductible as an above-the-line adjustment, reducing your adjusted gross income even if you do not itemize.
- If your net SE income is less than $400, you generally do not owe SE tax.
- Quarterly estimated tax payments (Form 1040-ES) are required if you expect to owe $1,000 or more in total tax for the year.
- Self-employed individuals may also deduct 100% of health insurance premiums paid for themselves and their family as an above-the-line deduction.
Self-employment tax: frequently asked questions
What is the self-employment tax rate?
The SE tax rate is 15.3% on net self-employment income up to the Social Security wage base ($176,100 for 2025), which covers 12.4% for Social Security and 2.9% for Medicare. Net earnings above the wage base are taxed at 2.9% for Medicare only.
Why is SE tax calculated on 92.35% of net earnings?
The 92.35% factor (i.e., 1 minus the employer-equivalent share of 7.65%) mirrors how employees pay FICA only on their wages, not on the employer share. Multiplying by 0.9235 gives the net earnings from self-employment on which the 15.3% rate applies.
Can I deduct the self-employment tax?
Yes. You may deduct half of your SE tax as an above-the-line adjustment to income on Schedule 1 of Form 1040. This deduction reflects the employer-equivalent portion and reduces your adjusted gross income.
Who must pay self-employment tax?
Anyone with net self-employment earnings of $400 or more must pay SE tax and file Schedule SE. This includes sole proprietors, freelancers, independent contractors, and members of certain partnerships.
Does self-employment tax count toward Social Security credits?
Yes. The Social Security portion of SE tax (12.4%) counts toward earning Social Security credits and ultimately your Social Security retirement and disability benefits, just as FICA withholding does for employees.
Official sources
- IRS: About Schedule SE (Form 1040).
- IRS: Publication 334 (Tax Guide for Small Business).
- Social Security Administration: Contribution and Benefit Base.
Reviewed by the CalculatorHub team, edited by James Graham, 15 June 2026. See our methodology.