Self-Employment Tax Calculator
Calculate Social Security and Medicare taxes for freelancers, contractors, and business owners using 2024 rates
Self-Employment Tax Calculator
Calculate self-employment tax (Social Security + Medicare) for freelancers and business owners using 2024 rates
Income minus business expenses
Affects additional Medicare threshold
Total SE Tax (15.3%)
$11,304
Effective Rate: 14.13%
Deductible Portion (50%)
$5,652
Reduces your taxable income
Tax Breakdown
Net After SE Tax
$68,696
Before income tax
What is Self-Employment Tax?
Self-employment tax is the Social Security and Medicare tax paid by people who work for themselves. When you're an employee, your employer pays half of these taxes and you pay the other half through payroll deductions. When you're self-employed, you pay both halves.
The total self-employment tax rate is 15.3%, consisting of 12.4% for Social Security and 2.9% for Medicare. However, you can deduct the employer-equivalent portion (7.65%) when calculating your income tax.
2024 Self-Employment Tax Rates
Social Security
12.4%
On first $168,600
Medicare
2.9%
On all earnings
Total SE Tax
15.3%
Combined rate
How SE Tax is Calculated
Step 1: Calculate Net Earnings
Net SE earnings = Gross income - Business expenses
Step 2: Apply 92.35% Multiplier
SE taxable income = Net earnings × 0.9235
This reduces your SE tax base to account for the employer portion deduction
Step 3: Calculate Each Component
Social Security tax = Min(SE taxable income, $168,600) × 12.4%
Medicare tax = SE taxable income × 2.9%
Step 4: Deductible Portion
Deductible SE tax = Total SE tax × 50%
This reduces your adjusted gross income (AGI) for income tax purposes
Additional Medicare Tax
High earners pay an additional 0.9% Medicare tax on self-employment income above certain thresholds:
Single / Head of Household
$200,000
0.9% on income above threshold
Married Filing Jointly
$250,000
0.9% on income above threshold
Quarterly Estimated Payments
Self-employed individuals must pay estimated taxes quarterly to avoid penalties. Payments are due:
Q1
Jan-Mar
April 15
Q2
Apr-May
June 17
Q3
Jun-Aug
Sept 16
Q4
Sep-Dec
Jan 15
Who Must Pay SE Tax?
Must Pay SE Tax
- Freelancers and consultants
- Independent contractors
- Sole proprietors
- General partners
- LLC members (in most cases)
- Gig economy workers
Generally Exempt
- Net earnings under $400
- S-corp shareholders (on distributions)
- Limited partners (generally)
- Real estate rental income (usually)
- Investment income
Frequently Asked Questions
Is SE tax separate from income tax?
Yes. Self-employment tax is paid in addition to income tax. However, you can deduct 50% of SE tax when calculating your adjusted gross income, which reduces your income tax.
Do I pay SE tax on gross or net income?
SE tax is calculated on net self-employment income (gross income minus deductible business expenses). Make sure to track all legitimate business expenses to reduce your SE tax.
Can I reduce SE tax by forming an S-corp?
Yes, but carefully. S-corp owners pay themselves a "reasonable salary" (subject to payroll taxes) and take additional profits as distributions (not subject to SE tax). However, the IRS scrutinizes artificially low salaries.
What happens if I don't pay quarterly estimates?
The IRS charges underpayment penalties if you don't pay enough tax throughout the year. To avoid penalties, pay at least 90% of your current year tax or 100% of last year's tax (110% if your AGI exceeded $150,000).
Tax-Saving Strategies
Maximize deductions: Track all business expenses including home office, mileage, equipment, and professional development to reduce net SE income.
Retirement contributions: Contribute to a SEP-IRA, SIMPLE IRA, or Solo 401(k). These reduce both income tax and SE tax base (for SEP and SIMPLE).
Health insurance deduction: Self-employed individuals can deduct 100% of health insurance premiums as an above-the-line deduction.
Consider S-corp election: For higher earners, an S-corp structure may reduce overall SE tax, but requires reasonable salary and additional compliance costs.