Self-Employment Tax Calculator (2025)

Worked example

Example: single filer, $100,000 net profit, no W-2 wages.

1. Net earnings subject to SE tax: $100,000 × 0.9235 = $92,350.
2. Social Security base: $176,100 cap − $0 W-2 wages = $176,100. Since $92,350 is below the cap, the full $92,350 is taxed for Social Security.
3. Social Security portion: $92,350 × 12.4% = $11,451.40.
4. Medicare portion: $92,350 × 2.9% = $2,678.15.
5. Total SE tax: $11,451.40 + $2,678.15 = $14,129.55 (rounds to $14,130).
6. Deduction (half): $14,129.55 × 50% = $7,064.78, deducted on Schedule 1.
7. Additional Medicare Tax: $92,350 is below the $200,000 threshold, so $0.

Result: $14,130 SE tax for 2025, with $7,065 deductible against income tax.

High-earner note: a single filer with $250,000 net profit has net earnings of $230,875. Social Security caps at $176,100 × 12.4% = $21,836.40; Medicare is $230,875 × 2.9% = $6,695.38; SE tax = $28,531.78. Because $230,875 exceeds $200,000, Additional Medicare Tax adds ($230,875 − $200,000) × 0.9% = $277.88, for a total of about $28,809.66.

Why self-employment tax exists and who pays it

When you work for an employer, Social Security and Medicare (FICA) taxes are split: you pay 7.65% from your paycheck and your employer matches another 7.65%. When you are self-employed, you are both the worker and the employer, so you pay the full 15.3% yourself. That is what "self-employment tax" means, and it is separate from federal income tax.

You owe SE tax for 2025 if your net earnings from self-employment reach $400 or more. This covers sole proprietors, independent contractors, freelancers, gig-economy drivers, single-member LLC owners, and active partners in a partnership. It is reported on Schedule SE (Form 1040). Importantly, SE tax is charged even if you owe no income tax at all, because it funds your future Social Security and Medicare benefits rather than the general budget.

The 92.35% adjustment and the $176,100 wage cap

You do not pay 15.3% on your whole profit. Schedule SE first multiplies net profit by 92.35% (0.9235). That factor exists because an employee's wages are calculated after the employer's share of FICA has already been removed; the 7.65% reduction puts the self-employed on equal footing. So on $100,000 of profit, only $92,350 is the taxable base.

The two halves of the tax behave differently. The 12.4% Social Security portion only applies up to the annual wage base, which for 2025 is $176,100 (rising to $184,500 in 2026). Once your net earnings pass that ceiling, no more Social Security tax is due. The 2.9% Medicare portion has no cap and applies to every dollar of the 92.35% base. If you also received a W-2 in 2025, those wages use up part of the $176,100 cap first, so your SE Social Security tax may be reduced or eliminated even though Medicare still applies.

The deduction and the extra 0.9% Medicare surtax

SE tax feels heavy, but half of it comes back as a deduction. You deduct 50% of your self-employment tax on Schedule 1 as an adjustment to income, which lowers your adjusted gross income and therefore your income tax. This is an above-the-line deduction, so you get it even if you take the standard deduction. In the $100,000 example, that is a $7,065 reduction to taxable income.

High earners face an extra layer: the 0.9% Additional Medicare Tax. It applies to net earnings above $200,000 (single, head of household, qualifying surviving spouse), $250,000 (married filing jointly), or $125,000 (married filing separately). It is calculated on Form 8959, not Schedule SE, and any Medicare wages from a W-2 reduce your threshold dollar-for-dollar. Note two things: the employer half of Additional Medicare Tax does not exist, so none of this 0.9% is deductible, and it is added on top of the regular 15.3% computation.

Paying it: quarterly estimated taxes

No one withholds SE tax from a freelancer's payments, so the IRS expects you to pay as you go through quarterly estimated taxes (Form 1040-ES). For 2025 income, the deadlines are April 15 and June 16, 2025, September 15, 2025, and January 15, 2026. Missing them can trigger an underpayment penalty even if you pay in full by April.

A practical rule: set aside roughly 15.3% of your net profit for SE tax alone, then add your income-tax bracket on top. Because the deductible half and the 92.35% factor both shave the effective rate, most freelancers find their true SE cost lands near 14.1% of net profit until they approach the $176,100 cap. Keep clean records of business expenses, since every deductible dollar of expense lowers net profit and therefore both your SE tax and income tax at the same time.

Frequently asked questions