Self-Employment Tax Calculator

Last updated July 2, 2026

Self-employment tax is the portion of the federal tax burden that most surprises people transitioning from W-2 employment to freelance or contract work. As an employee, Social Security and Medicare taxes — collectively FICA — are split evenly between you and your employer at 7.65 percent each. As a self-employed person, you owe the full 15.3 percent: 12.4 percent for Social Security on the first $184,500 of net self-employment income in 2026, and 2.9 percent for Medicare with no cap. The calculation applies to 92.35 percent of net earnings — the IRS's adjustment that accounts for the fact that employees only pay on their share — so someone with $80,000 in net self-employment income pays SE tax on $73,880, producing a self-employment tax bill of $11,304.

The partial offset built into the system is a meaningful one: self-employed individuals can deduct half of their SE tax as an above-the-line deduction when calculating federal income tax. On the $11,304 SE tax example, $5,652 reduces taxable income before the standard deduction is applied, which at a 22 percent marginal rate saves approximately $1,243 in income tax. The net SE tax cost is therefore $11,304 minus $1,243 — approximately $10,061 — still substantially more than a W-2 employee pays on identical gross earnings. The QBI deduction — 20 percent of qualified business income for most self-employed people earning under $197,300 as single filers in 2026 — provides further relief, reducing taxable income by an additional 20 percent of net self-employment earnings for those who qualify.

Self-employed individuals should set aside 25 to 30 percent of net profit for taxes — covering SE tax at 15.3 percent plus federal income tax at their marginal rate. Make quarterly estimated payments on April 15, June 15, September 15, and January 15 to avoid underpayment penalties. The IRS treats missing estimated payments as a form of interest-free borrowing that they charge for at filing time.