Self-Employment Tax Calculator
As a freelancer or 1099 contractor, you pay the full 15.3% self-employment tax. Use this calculator to see exactly how much you owe — and discover ways to legally reduce it.
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Self-Employment Tax Calculator
Calculate your SE tax and discover savings opportunities
Your gross income minus business expenses (Schedule C line 31)
SE Tax
$14,130
Quarterly
$3,532
Effective Rate
14.1%
Disclaimer: This calculator provides estimates for educational purposes only. Actual tax liability depends on your specific circumstances, deductions, and credits. Consult with a qualified CPA for personalized tax planning advice.
Understanding Self-Employment Tax
Self-employment tax is the Social Security and Medicare taxes paid by people who work for themselves. When you're a W-2 employee, you only pay half of these taxes (7.65%), while your employer pays the other half. But when you're self-employed, you're both the employer and employee — so you pay the full 15.3%.
The 15.3% Breakdown
- Social Security (12.4%) — Split into two 6.2% portions (employee + employer). Capped at $176,100 for 2025.
- Medicare (2.9%) — Split into two 1.45% portions. No income cap.
- Additional Medicare (0.9%) — Applies to income above $200,000 (single) or $250,000 (married filing jointly).
The 92.35% Factor
Good news: the IRS doesn't tax 100% of your self-employment income. You get to reduce it by 7.65% (to 92.35%) before calculating SE tax. This mirrors what W-2 employees get — they don't pay tax on the employer's FICA contribution.
How to Reduce Your SE Tax
The most common strategies include:
- S-Corp Election — Split income into salary (taxed) and distributions (not taxed for SE purposes)
- Retirement Contributions — SEP-IRA or Solo 401(k) reduce your net SE income
- Health Insurance Deduction — Self-employed health insurance premiums reduce AGI
- Business Expense Optimization — Legitimate deductions reduce your net profit
Frequently Asked Questions
What is the self-employment tax rate?
The self-employment tax rate is 15.3%, consisting of 12.4% for Social Security and 2.9% for Medicare. Self-employed individuals pay both the employee and employer portions. However, only 92.35% of your net SE income is subject to this tax.
Why do I pay both halves of Social Security and Medicare?
As a W-2 employee, your employer pays half of FICA taxes (7.65%) and you pay the other half through paycheck withholding. When you're self-employed, you are both the employer and employee, so you pay both halves — the full 15.3%.
What is the 92.35% factor?
The IRS allows you to reduce your net SE income by 7.65% (to 92.35%) before calculating SE tax. This mirrors the fact that W-2 employees don't pay tax on the employer's share of FICA. It's a small but automatic deduction built into the calculation.
How can I reduce my self-employment tax?
The most common strategy is electing S-Corp status, which allows you to split income into salary (subject to SE tax) and distributions (not subject to SE tax). Other strategies include maximizing business deductions, retirement contributions (SEP-IRA, Solo 401k), and health insurance deductions.
When do I stop paying Social Security tax?
Social Security tax (12.4%) only applies up to the wage base limit — $176,100 for 2025. Income above this cap is only subject to Medicare tax (2.9% + 0.9% Additional Medicare Tax for high earners). If you have W-2 wages, they count toward the cap first.
Do I have to pay quarterly estimated taxes?
Yes, if you expect to owe $1,000 or more in taxes for the year and don't have sufficient withholding from other income sources. The IRS expects you to pay as you earn throughout the year. Failure to make quarterly payments can result in underpayment penalties.
Want to pay less SE tax?
The calculator shows your current burden — but there may be legal ways to significantly reduce it. Book a free strategy session to explore your options.
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