Self-Employment Tax Calculator

Self-Employment Tax Explained: What Freelancers Owe and Why

Self-employment tax is the freelancer's version of FICA — the Social Security and Medicare taxes that W-2 employees split with their employer. The critical difference is that you pay both halves. At 15.3 percent of your net earnings, SE tax is often a freelancer's single largest tax bill, frequently exceeding federal income tax for earners in the lower and middle brackets.

The 15.3 percent rate breaks into two components: 12.4 percent for Social Security (capped at $184,500 of earnings in 2026) and 2.9 percent for Medicare (no cap). If your net self-employment income exceeds $200,000 as a single filer or $250,000 filing jointly, an additional 0.9 percent Medicare surtax applies to the excess.

How This Calculator Works

Enter your net self-employment income (gross revenue minus business expenses) and filing status. The calculator applies the 92.35 percent adjustment that the IRS uses to mirror the employer-equivalent share, computes Social Security and Medicare taxes separately, checks for the Additional Medicare Tax threshold, and calculates the deductible half of SE tax that reduces your adjusted gross income. In Advanced mode, you can enter business deductions and state tax rates, and turn on the Qualified Business Income (QBI) deduction under Section 199A — including the service-business and payroll limits that reduce or eliminate it above the income threshold.

How Self-Employment Tax Works

If you work for yourself as a freelancer, consultant, or sole proprietor, you are responsible for paying self-employment tax. This covers Social Security and Medicare — the same taxes that W-2 employees split with their employer. The difference is that you pay both halves.

The 92.35% Rule

The IRS only taxes 92.35% of your net self-employment income. This adjustment mirrors the fact that employers pay half of FICA taxes and that portion is not taxed. So on $100,000 of net SE income, only $92,350 is subject to SE tax.

Social Security vs Medicare

The 15.3% SE tax rate breaks down into two parts: 12.4% for Social Security (capped at $184,500 in wages for 2026) and 2.9% for Medicare (no cap). If your income exceeds $200,000 (single) or $250,000 (married filing jointly), you also owe an additional 0.9% Medicare tax on the excess.

The 50% Deduction

You can deduct half of your self-employment tax when calculating your adjusted gross income. This deduction reduces your income tax but does not reduce your SE tax itself. It goes on line 15 of Schedule 1 (Form 1040).

Schedule SE

Schedule SE is the IRS form that calculates your self-employment tax. The short version (Section A) works for most self-employed individuals with net earnings under $184,500. If your income is higher or you have church employee income, you will need the long version (Section B).

Self-Employment Tax by Income Level

The table below shows approximate SE tax amounts for single filers at various net income levels, before considering the half-SE-tax deduction on income taxes.

Net SE Income	SE Tax (15.3%)	Additional Medicare	Total SE Tax
$50,000	$7,065	$0	$7,065
$75,000	$10,597	$0	$10,597
$100,000	$14,130	$0	$14,130
$150,000	$21,195	$0	$21,195
$200,000	$24,975	$0	$24,975
$250,000	$27,399	$463	$27,862

Notice that at $184,500 the Social Security portion (12.4 percent) caps out. Above that threshold, only the 2.9 percent Medicare tax continues. This creates a natural inflection point where the effective SE tax rate drops from 15.3 percent to 2.9 percent on marginal income.

Strategies to Reduce Self-Employment Tax

Maximize business deductions. Every dollar of legitimate business expense reduces your net SE income and therefore your SE tax. Common deductions include home office (simplified or actual), equipment depreciation, software subscriptions, professional development, business insurance, and mileage for client meetings.

Consider S-Corp election. An S-Corporation structure lets you split income between a reasonable salary (subject to SE tax) and distributions (not subject to SE tax). For freelancers earning above $80,000 to $100,000, this can save thousands per year. However, S-Corps come with additional administrative costs including payroll processing and separate tax filings, so the savings must outweigh the overhead.

Contribute to retirement accounts. Solo 401(k) employer contributions reduce your net self-employment income reported on Schedule SE. A $20,000 employer contribution at the 15.3 percent SE tax rate saves roughly $3,060 in SE tax while simultaneously building your retirement fund.

Time large expenses strategically. If you plan a major equipment purchase or professional development investment, timing it to fall in a high-income year maximizes the SE tax reduction. Bunching deductible expenses into years with peak earnings amplifies their impact.

The QBI Deduction Above the Income Threshold

Section 199A is simple until your taxable income passes $201,750 as a single filer or $403,500 filing jointly. Below that line, the deduction is just the smaller of 20 percent of your qualified business income or 20 percent of your taxable income. Above it, two separate limits phase in across the next $75,000 ($150,000 on a joint return), and for a service business they compound.

The service business limit. If you are a consultant, therapist, lawyer, accountant, financial adviser, or work in any field where the business essentially sells your own skill and reputation, you run a specified service trade or business. Across the phase-in range only an applicable percentage of your income counts as qualified business income — 100 percent at the threshold, falling in a straight line to nothing at $276,750 ($553,500 joint). Past that point the business is not a qualified trade or business at all.

The payroll limit. Over the same range, the deduction is separately capped at the greater of 50 percent of the W-2 wages your business pays or 25 percent of those wages plus 2.5 percent of the original cost of qualifying business property. Your own owner's draw is not W-2 wages. A solo freelancer with no employees and no equipment therefore has a cap of zero, which is why a high-earning sole proprietor can lose the deduction entirely even in a non-service field.

For a service business with no payroll, both reductions apply to the same income, so the deduction falls off considerably faster than a straight line across the range. That is not a quirk of this calculator — it is what Form 8995-A does when Schedule A reduces your income and wages first and Part III then phases in the wage cap on the reduced figures.

What this calculator does not model

It assumes a single trade or business with no aggregation, no REIT or publicly traded partnership income, no qualified business loss carried forward from a prior year, and no patron reduction for cooperative members. It assumes you materially participate in the business, which matters only for the Section 199A minimum deduction. Net capital gain is treated as zero, since there is no capital gains input — if you have significant long-term gains or qualified dividends, your 20-percent-of-taxable-income ceiling is lower than shown. The de minimis rules that let a business with a small share of service revenue escape service-business treatment are not applied; if that describes you, choose the non-service option. Tips and overtime income are treated as ordinary income, so the temporary deductions for those are not reflected.