Professional services
Self-Employment Tax Calculator
Works self-employment tax, which is the employer and employee shares of payroll tax combined.
Result
Not tax advice, and not a filing calculation. This estimates what to set aside using rates you supply. Brackets, thresholds, deductions, credits and state rules change every year and interact with the rest of your return in ways no single calculator models. Confirm anything that affects a payment or a filing with an accountant. Self-employment tax applies to about 92.35% of net earnings, and half of it is deductible against income tax. The Social Security portion stops above an annual earnings threshold that changes each year; this does not model that cap, so it overstates the tax for higher earners. An additional Medicare surtax applies above certain income thresholds and is not modelled here.
Get a Free Business AuditHow the calculation works
Self-employment tax applies to net earnings from self-employment, computed on a statutory share of net profit rather than on the whole of it, at a combined rate covering Social Security and Medicare. The Social Security element stops at an annual wage base while the Medicare element continues without limit, and an additional Medicare amount applies above a threshold. Half the resulting tax is deductible against income tax.
What moves the number
- Net profit after business expenses.
- Whether earnings exceed the Social Security wage base.
- Other wage income, which uses up the wage base first.
- The current year's rates and thresholds, which change.
Where this one goes wrong
Wages from a job count against the same Social Security wage base, so someone with substantial W-2 wages and a side business may already have used it up, and applying the full combined rate to the self-employment income overstates the tax. The deduction of half the self-employment tax against income tax is the other item routinely missed. Rates, wage bases and thresholds change annually, and this is a planning estimate rather than a filing position.
Before you quote
- Account for W-2 wages already applied against the wage base.
- Deduct half the self-employment tax against income tax.
- Confirm the current year's rates and wage base.
Where the rules come from
Questions
About this calculator
Why is self-employment tax so high?
Because it covers both the employee and employer shares of Social Security and Medicare, which an employer would otherwise have paid half of. The rate is roughly double the payroll tax a wage earner sees on their pay stub.
Does a day job reduce my self-employment tax?
It can, because W-2 wages count against the same annual Social Security wage base. Someone with substantial wages may already have used it up, in which case only the Medicare element applies to the self-employment income.
Is any of it deductible?
Half the self-employment tax is deductible against income tax, which softens the total. It is one of the most routinely missed adjustments in self-prepared estimates, and leaving it out overstates the overall bill.
The formula
net earnings x 92.35%, then 12.4% Social Security up to the wage base plus 2.9% Medicare with no cap
Put this calculator on your site
Free to embed. Paste this where you want it to appear. It stays up to date automatically because it loads from BDEVY.
Please keep the attribution line. It is the only thing we ask in return.
How to use this calculator
- Net business earnings ($). Revenue less deductible business expenses.
- Self-employment tax rate (%). Enter your own figure; the page starts at 15.3%.
- W-2 wages already earned ($). Reduces the Social Security portion still owed.
- Social Security wage base ($). Changes annually. Check the current figure.
The result updates as you type, so you can try a figure, see what it does to self-employment tax, and change it back. Nothing you enter is sent anywhere or saved.
A worked example
These are the figures the calculator opens with. Every number in the results column below is produced by the same calculation the page runs, so you can follow it through before putting your own figures in.
What goes in
| Input | Value |
|---|---|
| Net business earnings | $85,000 |
| Self-employment tax rate | 15.3% |
| W-2 wages already earned | $0 |
| Social Security wage base | $168,600 |
What comes out
| Result | Value |
|---|---|
| Self-employment tax main result | $12,010 |
| Earnings subject to it | $78,498 |
| Social Security portion | $9,734 |
| Medicare portion | $2,276 |
| Deductible against income tax | $6,005 |
Self-employment tax is $12,010 on $78,498 of taxable earnings: $9,734 Social Security and $2,276 Medicare. Half of it, $6,005, is deductible against income tax.
How sensitive the answer is
Holding everything else steady and changing only net business earnings, this is what happens to self-employment tax. It is worth knowing which of your inputs the answer actually hinges on, and which barely move it.
| Net business earnings ($) | Self-employment tax |
|---|---|
| $42,500 | $6,005 |
| $63,750 | $9,008 |
| $85,000 example above | $12,010 |
| $127,500 | $18,015 |
| $170,000 | $24,020 |
Every other input is held at the example value while this one changes, which is not how a real job behaves. Treat it as a guide to which number matters most, not as five separate quotes.
What each figure means
- Net business earnings ($)
- Revenue less deductible business expenses.
- Self-employment tax rate (%)
- A percentage, between 0 and 20, starting at 15.3%.
- W-2 wages already earned ($)
- Reduces the Social Security portion still owed.
- Social Security wage base ($)
- Changes annually. Check the current figure.
What the results tell you
| Result | What it is |
|---|---|
| Self-employment tax | The headline result. A money figure. |
| Earnings subject to it | A money figure. |
| Social Security portion | A money figure. |
| Medicare portion | A money figure. |
| Deductible against income tax | A money figure. |
Keep going
Related calculators
Estimating is the easy part
The jobs you never hear about cost more than the ones you mis-measure. BDEVY builds the marketing, systems and automation that bring them in.