If you freelance, contract, or run a small business, you owe self-employment tax to fund Social Security and Medicare — the same programs payroll taxes cover for employees. This calculator estimates that tax from your net profit for the 2025 tax year.
How Self-Employment Tax Works
You pay SE tax on 92.35% of your net self-employment earnings. The 15.3% rate combines 12.4% for Social Security and 2.9% for Medicare. The Social Security portion applies only up to the annual wage base ($176,100 in 2025); the Medicare portion applies to all earnings.
Worked Example
On $60,000 of net profit: taxable base = 60,000 × 0.9235 = $55,410. SE tax = 55,410 × 15.3% ≈ $8,478. You can deduct half of that (about $4,239) as an above-the-line deduction on your income tax return.
What to Remember
- SE tax is separate from federal income tax — you owe both on the same profit.
- You can deduct half of your SE tax when figuring your income tax.
- Most self-employed people pay this through quarterly estimated taxes to avoid penalties.
This is a 2025 estimate; it does not include the extra 0.9% Additional Medicare Tax that applies to very high earners.