SE Tax Calculator
Calculate Social Security and Medicare taxes for self-employed income.
Formula
SE Tax = Net SE Income × 92.35% × 15.3% (Social Security: 12.4% on income up to wage base; Medicare: 2.9% on all income)
How to Calculate
Self-employment tax is the Social Security and Medicare tax paid by people who work for themselves. Employees split these taxes 50/50 with their employer, but self-employed individuals pay both halves, totaling 15.3%.
Start with your net self-employment income (Schedule C profit or partnership/LLC distributive share). Multiply by 92.35% to get the adjusted SE income—this adjustment accounts for the fact that employees do not pay FICA on the employer's share. Then apply the 15.3% rate (12.4% Social Security + 2.9% Medicare).
The Social Security portion only applies to income up to the annual wage base ($168,600 in 2024). Income above that threshold only owes the 2.9% Medicare tax, plus an additional 0.9% Medicare surtax if your total income exceeds $200,000 (single) or $250,000 (married filing jointly). You can deduct half of SE tax from your adjusted gross income, which reduces your income tax.
Worked Example
A freelance consultant has $120,000 in net self-employment income.
Adjusted SE income: $120,000 × 92.35% = $110,820 Social Security tax: $110,820 × 12.4% = $13,742 Medicare tax: $110,820 × 2.9% = $3,214 Total SE tax: $13,742 + $3,214 = $16,956
Deductible half: $16,956 / 2 = $8,478 (reduces AGI for income tax purposes)
If this consultant also had $100,000 in W-2 wages, the Social Security portion would only apply to the first $48,600 of SE income ($168,600 wage base − $100,000 W-2 wages = $68,600, then × 92.35%).
Why It Matters
Self-employment tax is often the largest tax surprise for new freelancers and business owners. At 15.3%, it can exceed your income tax liability, especially at lower income levels. Understanding SE tax is critical for pricing your services, planning quarterly payments, and evaluating whether an S-Corp election could reduce your overall tax burden.
Practical Tips
- ✓Deduct the employer-equivalent half of SE tax on your 1040—many taxpayers miss this deduction.
- ✓Evaluate S-Corp election once net income exceeds $50,000–$60,000 to potentially split income between salary (subject to SE tax) and distributions (not subject to SE tax).
- ✓Maximize business deductions to reduce net SE income and the SE tax base.
- ✓Remember SE tax applies to net income—gross revenue minus legitimate business expenses.
Frequently Asked Questions
Why do I have to pay both halves of Social Security and Medicare?
Does SE tax apply to rental income or investment income?
How can an S-Corp election reduce SE tax?
Skip the Manual Calculations
FiscalInsights automates your financial calculations, tracks your metrics in real time, and gives you actionable insights to grow your business.
Start Free TrialLearn More About This Topic
Related Calculators
Freelance Tax Calculator
Calculate estimated quarterly taxes including self-employment tax for freelancers.
Quarterly Tax Calculator
Estimate quarterly estimated tax payments for self-employed individuals.
Sales Tax Calculator
Calculate sales tax for any US state or locality. Find rates and totals.
Payroll Tax Calculator
Calculate employer payroll tax obligations including FICA and FUTA.