Calculate self-employment taxes including Social Security and Medicare. Understand your tax obligations as a freelancer or business owner.
Enter your net self-employment income. The calculator computes 15.3% self-employment tax (12.4% Social Security + 2.9% Medicare) and shows the deductible portion.
Use for quarterly estimated tax payments, tax planning, or budgeting as a self-employed individual. Helps avoid penalties and surprises.
Calculate your self-employment tax, including Social Security and Medicare contributions for freelancers and independent contractors.
Enter your business financials
Self-employed individuals pay both the employer and employee portions of Social Security (12.4%) and Medicare (2.9%) taxes, totaling 15.3% on 92.35% of net profit.
We believe in full transparency. All calculations and data used in this calculator are based on official sources:
Official self-employment tax rates and calculations
Quarterly estimated tax payment requirements
Self-employment tax is how self-employed individuals pay Social Security and Medicare taxes, which employees and employers normally split.
Total Rate: 15.3% of net self-employment income
| Component | Rate | Purpose |
|---|---|---|
| Social Security | 12.4% | Retirement, disability, survivor benefits |
| Medicare | 2.9% | Healthcare coverage after 65 |
| Total | 15.3% | Combined SE tax |
| Tax | Employee Pays | Employer Pays | Self-Employed Pays |
|---|---|---|---|
| Social Security | 6.2% | 6.2% | 12.4% |
| Medicare | 1.45% | 1.45% | 2.9% |
| Total | 7.65% | 7.65% | 15.3% |
Key Difference: As self-employed, you pay BOTH the employee and employer portions.
Net self-employment income: $60,000
SE Tax = $60,000 × 92.35% × 15.3% = $8,478
Why 92.35%? You can deduct half of your SE tax from your income before calculating SE tax (prevents double taxation).
| Net Self-Employment Income | SE Tax Owed | Effective SE Tax Rate |
|---|---|---|
| $30,000 | $4,239 | 14.1% |
| $50,000 | $7,065 | 14.1% |
| $75,000 | $10,598 | 14.1% |
| $100,000 | $14,130 | 14.1% |
| $160,000 | $21,894 | 13.7% |
Note: Rate slightly decreases for higher incomes due to Social Security wage cap.
While you can't eliminate SE tax, several strategies can reduce your tax burden significantly.
Every business expense reduces your taxable income:
| Deduction Category | Examples | Typical Savings |
|---|---|---|
| Home Office | Rent, utilities, internet | $3,000-$10,000 |
| Vehicle | Mileage, insurance, maintenance | $2,000-$8,000 |
| Equipment | Computer, phone, tools, software | $1,000-$15,000 |
| Professional Fees | Accountant, lawyer, coaches | $500-$5,000 |
| Advertising | Website, ads, marketing | $1,000-$10,000 |
| Insurance | Business liability, E&O | $500-$3,000 |
| Education | Courses, books, conferences | $500-$5,000 |
| Travel | Business trips, lodging, meals | $1,000-$10,000 |
Example Impact: $10,000 in deductions = $1,530 SE tax savings + income tax savings
Tax-deductible contributions reduce your taxable income:
| Account Type | 2024 Limit | Tax Benefit |
|---|---|---|
| SEP IRA | 25% of net earnings (max $69,000) | Full deduction |
| Solo 401(k) | $23,000 + 25% profits (max $69,000) | Full deduction |
| Traditional IRA | $7,000 ($8,000 if 50+) | Full deduction (income limits) |
Example: $100,000 net income, contribute $20,000 to Solo 401(k)
Self-employed can deduct 100% of health insurance premiums for yourself, spouse, and dependents
Example:
Strategy: Pay yourself reasonable salary, take rest as distributions (not subject to SE tax)
Example: $120,000 net income
| Structure | SE Tax | Strategy |
|---|---|---|
| Sole Proprietor | $16,956 | All income subject to SE tax |
| S-Corp | $9,180 | $60k salary (SE tax), $60k distribution (no SE tax) |
| Savings | $7,776 | Worth it for high earners |
Considerations:
Tax benefits:
Example: Hire teenage child for $10,000/year
Maximize legitimate deductions by tracking everything:
Better records = more deductions = lower taxes
High earners pay an extra 0.9% Medicare tax on income above certain thresholds.
| Filing Status | Threshold | Additional Tax Rate |
|---|---|---|
| Single | Over $200,000 | 0.9% |
| Married Filing Jointly | Over $250,000 | 0.9% |
| Married Filing Separately | Over $125,000 | 0.9% |
| Head of Household | Over $200,000 | 0.9% |
Below threshold: Regular 2.9% Medicare tax
Above threshold: 2.9% + 0.9% = 3.8% total Medicare tax
Single filer, $250,000 self-employment income:
| Income Range | Medicare Tax Rate | Tax Owed |
|---|---|---|
| First $200,000 | 2.9% × 92.35% | $5,356 |
| $200,001-$250,000 | 3.8% × 92.35% | $1,755 |
| Total Medicare Tax | - | $7,111 |
Additional Medicare Tax: $1,755 (the extra 0.9% on $50,000)
| Income | Social Security | Medicare | Additional Medicare | Total SE Tax |
|---|---|---|---|---|
| $100,000 | 12.4% | 2.9% | - | 15.3% |
| $160,200 | 12.4% (capped) | 2.9% | - | 15.3% |
| $200,000+ | 0% (over cap) | 2.9% | 0.9% | 3.8% |
Note: Social Security tax caps at $160,200 wage base (2024). Income above this is not subject to Social Security tax.
Quarterly estimates: Include Additional Medicare Tax in your estimated tax payments
Formula for high earners:
If income > threshold:
Additional Medicare Tax = (Income - Threshold) × 0.9%
Example: $300,000 income, single
Additional Medicare Tax = ($300,000 - $200,000) × 0.9% = $900
Related but different: High earners may also pay 3.8% Net Investment Income Tax on investment income (not self-employment)
Apply to: Capital gains, dividends, rental income, royalties
Same thresholds: $200k single, $250k married
Key: Can pay both Additional Medicare Tax AND NIIT, but on different types of income
Yes, most self-employed individuals must make quarterly estimated tax payments to avoid penalties.
You must pay estimated taxes if:
| Quarter | Income Period | Due Date |
|---|---|---|
| Q1 | Jan 1 - Mar 31 | April 15 |
| Q2 | Apr 1 - May 31 | June 15 |
| Q3 | Jun 1 - Aug 31 | September 15 |
| Q4 | Sep 1 - Dec 31 | January 15 (next year) |
Method 1: Prior Year Method (safe harbor)
Method 2: Current Year Method
Method 3: Actual Income Method
Expected annual income: $80,000 net Filing status: Single
| Tax Component | Calculation | Amount |
|---|---|---|
| SE Tax | $80,000 × 92.35% × 15.3% | $11,304 |
| Less: SE tax deduction | -$5,652 | |
| Taxable income | $80,000 - $5,652 - $14,600 std ded | $59,748 |
| Income Tax | Progressive brackets | ~$9,000 |
| Total Tax Owed | $20,304 | |
| Quarterly Payment | $20,304 ÷ 4 | $5,076 |
If you don't pay enough:
Example: Owe $5,000 but only paid $3,000
Options:
State taxes: Don't forget quarterly state estimated taxes too!
1. Set aside money: Put 25-30% of income in separate savings account
2. Automate: Set up automatic transfers to tax savings
3. Use Form 1040-ES: IRS provides worksheet to calculate payments
4. Adjust mid-year: If income changes significantly, recalculate
5. Consider: Using prior year safe harbor if income fluctuates
Self-employed individuals can deduct "ordinary and necessary" business expenses. Here's a comprehensive list:
1. Home Office Deduction
Requirements:
Calculation methods:
Example: 200 sq ft office in 2,000 sq ft home = 10%
2. Vehicle Expenses
Two methods:
| Method | 2024 Rate | Best For |
|---|---|---|
| Standard Mileage | 67¢ per mile | Less expensive vehicles, high miles |
| Actual Expenses | Track everything | Expensive vehicles, low miles |
Deductible with actual method:
Example: 15,000 miles, 80% business use
3. Equipment & Supplies
Fully deductible:
Section 179 deduction: Deduct full cost of equipment immediately (up to $1,160,000 in 2024)
4. Professional Services
5. Advertising & Marketing
6. Business Insurance
7. Health Insurance
8. Retirement Contributions
9. Education & Professional Development
Must: Maintain or improve skills in current business
10. Travel & Meals
Travel:
Meals:
11. Contract Labor
12. Bank Fees & Interest
Not deductible:
1. Separate Everything
2. Track in Real-Time
3. Document Business Purpose
4. Keep Records 3-7 Years
5. Use Apps
Bottom Line: When in doubt, track it! Better to have deductions you don't use than miss deductions you could have taken. Consult a tax professional for your specific situation.
Have more questions? These calculators provide estimates for educational purposes only. For personalized financial advice, consult with a qualified financial professional. See our disclaimer for more information.