About this calculator
Self-employment tax is the income tax of running your own business. Compared to W-2 employment, you owe both halves of FICA (a flat 15.3% on most of your net income), pay federal/state income tax on top, and are responsible for quarterly estimated payments instead of withholding. This calculator estimates the total burden.
The self-employment tax breakdown
15.3% of 92.35% of your net SE income — that’s 12.4% Social Security (capped at $168,600 wages in 2024) plus 2.9% Medicare (no cap; additional 0.9% above $200k). The 92.35% multiplier exists because the IRS lets you deduct the employer-half of SE tax before calculating it (because employer FICA isn’t taxed for W-2 workers either).
Key deductions for self-employed
- SE tax deduction — 50% of SE tax is deductible above-the-line, partially offsetting it.
- QBI deduction — up to 20% of "qualified business income" for pass-through entities (sole prop, S-corp, LLC). Phases out at $190k single / $383k joint (2024).
- Home office — square-foot percentage of mortgage interest, utilities, repairs. Strict requirements for "regular and exclusive use."
- Health insurance premiums — fully deductible above-the-line if you don’t have access to a spouse’s employer plan.
- SEP-IRA or Solo 401(k) — up to $69k/yr (2024) tax-deferred. The single biggest tax shelter for high-income self-employed.
Quarterly estimated taxes
Pay 25% of expected annual tax on April 15, June 15, September 15, and January 15. Underpayment penalty applies if you owe more than $1,000 at year-end AND haven’t paid at least 90% of current year tax (or 100% of last year’s, 110% if AGI > $150k). The "safe harbor" of last year’s tax is the easiest to hit.
When an S-corp election makes sense
Around $60k+ in net SE income, electing S-corp status (Form 2553) often saves SE tax. You pay yourself a "reasonable salary" subject to FICA, and the rest is distribution (no FICA). The savings can be $5–15k/yr at $100k+ income, against ~$1–2k/yr in added accounting cost. Always model this with an accountant before electing.