Self-Employment Tax Calculator

A sole proprietor pays both halves of payroll tax. On every dollar of profit you owe the employee share and the employer share of Social Security and Medicare, which is 15.3% before a single dollar of income tax, and the deduction most people forget to claim against it.

Federal tax on $120,000 of income

$28,461.78

$16,955.46 of self-employment tax plus $11,506.32 of income tax

Self-employment tax: $16,955
Income tax: $11,506
Effective rate: 23.7%
Left after tax: $91,538

Where each dollar of income goes

Self-employment tax$16,955.46
Federal income tax$11,506.32
You keep$91,538.22

State and local tax comes out of the green slice, so what you actually keep is smaller than it looks.

The self-employment tax, line by line

Step	Amount	Rate
Net profit	$120,000.00
Net earnings (92.35% of profit)	$110,820.00	92.35%
Social Security half, shared with $184,500 of wages	$13,741.68	12.4%
Medicare half, no wage cap	$3,213.78	2.9%
Additional Medicare above the threshold	$0.00	0.9%
Total self-employment tax	$16,955.46	14.1%
Deductible half, taken off gross income	$8,477.73

$110,820 of net earnings are still under the Social Security wage base once your W-2 wages are counted.

From profit to taxable income

Line	Amount
Business profit	$120,000.00
Less half of the self-employment tax	-$8,477.73
Adjusted gross income	$111,522.27
Less standard or itemised deduction	-$16,100.00
Less qualified business income deduction	-$19,084.45
Taxable income	$76,337.82
Federal income tax	$11,506.32

The qualified business income deduction is capped here: it cannot exceed 20% of taxable income before the deduction.

Quarterly estimated payments

Payment	Roughly due	Amount
Payment 1	April 15	$7,115.45
Payment 2	June 15	$7,115.45
Payment 3	September 15	$7,115.45
Payment 4	January 15 next year	$7,115.45
Total for the year		$28,461.78

Four equal payments is the simplest plan. Late payments are normally avoided by paying 90% of this year tax or 100% of last year tax, and 110% of last year when adjusted gross income was above $150,000.

Setting aside about $2,371.82 a month covers the federal bill at this profit level. State income tax, local business tax and any licence fees come on top.

JavaScript is off, so the values above are the built-in defaults. Every formula used on this page is documented below, so you can still follow the maths by hand.

Enter your business profit and this calculator shows the tax Schedule SE would compute, the half of it you can deduct, the qualified business income deduction underneath, and the quarterly payment that keeps the bill from arriving all at once.

How this self-employment tax calculator works

The 92.35% starting point

Self-employment tax starts from net earnings: profit after business expenses, multiplied by 92.35%. The 7.65% haircut stands in for the employer half of payroll tax, which by definition is not part of your own income.

Net earnings are then taxed at 12.4% for Social Security and 2.9% for Medicare. The Social Security half stops at the annual wage base, which is $184,500 for 2026, and every dollar of wages from an employer job uses up that base first. Medicare has no wage cap.

When the extra 0.9% applies

Additional Medicare tax of 0.9% applies to earnings above $200,000 for single and head of household filers and above $250,000 for a couple filing jointly. The threshold is shared between your W-2 wages and your self-employment earnings, so a side business on top of a large salary can cross it with less profit than you expect.

Employers withhold 0.9% once wages pass $200,000 regardless of filing status. That withholding is only a prepayment: the return settles the true amount later, and a self-employed filer who crosses the threshold owes the tax as an estimated payment instead.

Deductions before the income tax

Half of the self-employment tax is deductible above the line, which is how the law corrects for the fact that you are paying the employer share as well. The same is true of retirement contributions made for yourself and of health insurance premiums you pay personally.

Below those comes the standard deduction, or your itemised deductions when they are larger, and then the qualified business income deduction: 20% of profit, capped at 20% of taxable income before the deduction. Income tax is charged only on what is left.

Quarterly payments

There is no employer withholding your tax for you, so the bill has to be paid as estimated payments four times a year. Paying four equal instalments that add up to the annual figure is the simplest plan that avoids an underpayment penalty.

The safe harbour is 90% of the tax you owe this year, or 100% of last year tax (110% when last year adjusted gross income was above $150,000). Using last year tax makes the planning predictable, because the amount is known before the year starts.

Worked examples

Each example below was run through the calculator on this page when the site was built, so the numbers match what you see when you enter the same inputs.

Designer with $120,000 of profit

Business profit for the year: $120,000.00
Filing status: Single

Federal tax on $120,000 of income

$28,461.78

$16,955.46 of self-employment tax plus $11,506.32 of income tax

Self-employment tax: $16,955
Income tax: $11,506
Effective rate: 23.7%
Left after tax: $91,538

Self-employment tax alone is about $17,000, and the deductible half is what stops income tax being charged on the employer share you never received.

Side business on top of a $180,000 salary

Business profit for the year: $40,000.00
Filing status: Single
W-2 wages from a job: $180,000.00

Federal tax on $220,000 of income

$41,224.67

$1,781.72 of self-employment tax plus $39,442.95 of income tax

Self-employment tax: $1,782
Income tax: $39,443
Effective rate: 18.7%
Left after tax: $178,775

The salary has almost used the Social Security wage base, so the side income is charged Medicare only until the base is exhausted.

First year at $30,000 with a SEP-IRA and health cover

Business profit for the year: $30,000.00
Filing status: Single
Retirement contributions: $5,000.00
Self-employed health insurance: $6,000.00

Federal tax on $30,000 of income

$4,301.32

$4,238.87 of self-employment tax plus $62.45 of income tax

Self-employment tax: $4,239
Income tax: $62
Effective rate: 14.3%
Left after tax: $25,699

Retirement and health insurance come off before the standard deduction, so they reduce income tax but never reduce the self-employment tax itself.

Frequently asked questions

How much is self-employment tax?

15.3% of net earnings: 12.4% for Social Security and 2.9% for Medicare. Because net earnings are only 92.35% of profit, the effective rate on profit is about 14.13% below the Social Security wage base. Above the wage base only the 2.9% Medicare half continues.

Do I owe self-employment tax on money I take out of the business?

No. Self-employment tax is charged on profit, not on drawings. Sole proprietors and partners pay it on the business profit they report whether or not they move the money, and an owner who leaves profit in the business still owes it.

What is the $400 threshold?

Net earnings of $400 or more from self-employment normally mean a Schedule SE and self-employment tax, even for a side business that made very little. Under that figure the tax does not apply, though income tax on the profit still does.

Why is only part of my self-employment tax deductible?

Because the employer half is a business cost rather than personal income: deducting half of the tax puts you in roughly the same position as an employee whose employer paid that half. The deduction reduces income tax, not the self-employment tax itself.

Do I have to make quarterly payments?

Usually yes, unless withholding from a job covers the bill or you owe very little. Each payment is due on the fifteenth of April, June, September and the following January, and paying four equal instalments that match the annual figure is the simplest way to stay inside the rules.

Would an S corporation reduce this tax?

The usual argument is that a salary is subject to payroll tax and the rest is a distribution that is not. It only holds when the salary is reasonable for the work performed, and the entity brings its own filing fees, payroll and accounting costs. Run the numbers for your own state and income before switching.

Is any of this tax avoidable by paying myself a lower salary?

A sole proprietor cannot choose: the profit is the tax base. Retirement contributions, health insurance and business expenses genuinely reduce it because they reduce profit. Anything else that claims to remove self-employment tax is usually either a different entity type or not allowed.

Assumptions and sources

Rates: IRS Topic no. 751 and Publication 15 (2026) - Social Security 6.2% each side (12.4% for the self-employed), Medicare 1.45% each side (2.9%), Additional Medicare 0.9% above $200,000 single or head of household and $250,000 married filing jointly.
Wage base: the 2026 Social Security wage base is $184,500, shared between W-2 wages and self-employment earnings.
Net earnings factor of 92.35%, the $400 filing threshold and the one-half deduction: IRS Topic no. 554 and Schedule SE.
Ordinary income brackets and the standard deduction: IRS Revenue Procedure 2025-32 (2026 inflation adjustments).
Simplifications: the QBI deduction is the simple 20% of profit limited to 20% of taxable income, so specified service trades and the income phase-in are not modelled. Tax credits, the alternative minimum tax, state and local taxes and S-corporation treatment are outside this calculator.

Last reviewed 2026-09-14. This page is an estimate tool, not financial, tax or legal advice.Read the full disclaimer.

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