Phase 1 · Core Sovereign Layer
Self-Employment Tax Calculator
Be your own boss and you pay both halves of FICA — 15.3% before income tax even starts. See the bite on your profit, the half you get to deduct, and the number to set aside.
How much self-employment tax will I owe?
Self-employment tax is 15.3% — both halves of FICA — but it applies to 92.35% of net profit, not all of it, giving an effective rate near 14.13%. It splits into 12.4% Social Security, capped at the annual wage base, and 2.9% Medicare, which is uncapped. Half of what you pay is deductible against income tax.
- SE base = net profit × 0.9235. On $80,000 of profit that is $73,880.
- Worked example (2026, defaults on this page): $80,000 profit owes $9,161 Social Security + $2,143 Medicare = $11,304, of which $5,652 is deductible before income tax.
- The Social Security portion stops at the $184,500 wage base for 2026, and W-2 wages you already earned use that cap first. Medicare never stops, and adds 0.9% above the high-earner threshold.
- This is on top of income tax, which is why setting aside only your income-tax rate leaves you short every April.
Under the hood
The math, fully exposed
We apply the 92.35% factor, then the two FICA halves with the Social Security wage cap:
SE base = net profit × 0.9235
Social Security = 12.4% × SE base, up to ($184,500 − W-2 wages)
Medicare = 2.9% × SE base (+0.9% above your threshold)
Deductible half = SE tax ÷ 2, off your income before income tax
- It stacks on income tax: the 15.3% comes before federal and state income tax — the combined bill is what blindsides new freelancers.
- The wage cap is relief: once W-2 wages plus SE base pass the Social Security cap, the 12.4% portion stops and only the 2.9% Medicare remains.
- Half comes back: deducting the employer-equivalent half lowers your income tax — not the SE tax itself, but a real saving at your marginal rate.
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What to do next, based on your numbers
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Answers
Frequently asked questions
What is self-employment tax and why is it 15.3%?
When you are an employee, you pay 7.65% of FICA (Social Security + Medicare) and your employer pays the other 7.65%. When you work for yourself, you are both — so you owe the full 15.3%. That is on top of regular income tax, which is why a freelancer's total tax bill shocks first-timers. The 15.3% breaks down as 12.4% Social Security (up to a wage cap) and 2.9% Medicare (no cap).
Why is the tax calculated on only 92.35% of my profit?
Because employees do not pay FICA on the employer's half of FICA, the tax code evens the playing field by letting you exclude an equivalent 7.65% — so self-employment tax applies to 92.35% of your net profit, not 100%. This calculator applies that factor automatically, so the effective rate on your profit is closer to 14.1% than a flat 15.3%.
Can I deduct any of the self-employment tax?
Yes. You deduct half of your self-employment tax — the employer-equivalent portion — from your income before calculating income tax. It does not reduce the SE tax itself, but it lowers your income-tax bill, saving you your marginal rate on that half. This tool shows both the deduction and roughly what it saves you in income tax.
How does a W-2 job change my self-employment tax?
Social Security tax stops at an annual wage cap (about $184,500 in 2026). If a W-2 job has already used up part or all of that cap, your self-employment income owes less — or no — Social Security tax, though the 2.9% Medicare portion always applies. Enter your W-2 wages and watch the Social Security portion shrink as you approach the cap. This is an educational model, not tax advice.