Self-Employment Tax Calculator
Estimate the Social Security and Medicare tax you owe on 1099, freelance, or self-employment income — separate from your regular income tax.
How self-employment tax is calculated
If you're a freelancer, independent contractor, or small business owner filing as a sole proprietor, you're responsible for both the employee and employer portions of Social Security and Medicare — together called self-employment (SE) tax, at a combined rate of 15.3%.
- First, your net SE income is multiplied by 92.35% to get your taxable base (this roughly mirrors how an employer's matching share isn't taxed for W-2 employees).
- 12.4% of that base goes to Social Security, up to the annual wage base ($176,100 for 2026).
- 2.9% goes to Medicare, with no income cap (and an additional 0.9% above $200,000 single / $250,000 married).
SE tax is separate from — and in addition to — your regular federal and state income tax. You can deduct half of your SE tax when calculating your income tax, which this tool doesn't yet model; treat this as a starting estimate and confirm with a tax professional or your tax software.
Worked example
A freelancer with $60,000 in net self-employment income:
| Item | Amount |
|---|---|
| Net SE income | $60,000.00 |
| Taxable base (×92.35%) | $55,410.00 |
| Social Security (12.4%) | $6,870.84 |
| Medicare (2.9%) | $1,606.89 |
| Total SE tax | $8,477.73 |
That works out to roughly $2,119/quarter if set aside evenly for estimated tax payments — on top of regular income tax.
Frequently asked questions
Strategies to manage your self-employment tax bill
- Track deductible business expenses carefully — home office costs, equipment, software subscriptions, mileage, and professional services all reduce your net self-employment income, and therefore your SE tax, dollar for dollar.
- Pay quarterly estimated taxes on time — the IRS expects payments in April, June, September, and January for the prior quarter's income. Missing a deadline can trigger an underpayment penalty even if you pay everything by April 15.
- Consider an S-corp election once your income grows — at higher income levels, some self-employed business owners restructure as an S-corp to potentially reduce the portion of income subject to self-employment tax, by splitting earnings between a reasonable salary and distributions. This requires payroll setup and professional guidance — it isn't right for every freelancer.
- Open a separate "tax savings" account — automatically moving 25–30% of every client payment into a dedicated account prevents the common freelancer mistake of spending money that's already earmarked for the IRS.
Common self-employment tax mistakes
The most frequent error is freelancers confusing gross revenue with net income — self-employment tax applies only after subtracting legitimate business expenses, not on every dollar a client pays you. The second most common mistake is forgetting that self-employment tax is calculated in addition to regular federal income tax, not instead of it — many new freelancers budget only for income tax and are caught off guard by the extra 15.3%. Finally, many people overlook that half of their self-employment tax is deductible against their income tax, which slightly softens the overall hit but requires it to be claimed correctly on Schedule SE and Form 1040.