Estimate the Social Security and Medicare tax on your business profit — the extra 15.3% W-2 workers never see.
Self-employment tax
$11,304
2025 SECA estimate.
92.35% of profit.
12.4%, up to the wage base.
2.9%, no cap.
For SE tax alone.
Self-employment tax applies to 92.35% of your $80,000 profit — that's $73,880 of net earnings. On it you owe $9,161 for Social Security and $2,143 for Medicare, a combined $11,304. This is separate from and on top of federal income tax. Uses 2025 rates.
You can deduct $5,652, half your SE tax, against your income tax as an above-the-line deduction. It doesn't reduce the SE tax itself, but it lowers your taxable income, softening the overall bite. Employees split Social Security and Medicare with their employer; the self-employed pay both halves, which is why this deduction exists.
Estimate your income taxNo employer withholds this for you, so the IRS expects quarterly estimated payments. Setting aside roughly $2,826 every quarter for SE tax alone — plus more for income tax — avoids a large bill and underpayment penalties at tax time. A common rule of thumb is to reserve 25–30% of profit for all taxes combined.
A SEP-IRA or Solo 401(k) lets the self-employed contribute far more than a regular IRA, reducing the income tax on your profit (though not the SE tax). It's one of the biggest advantages of self-employment — you control a high-limit, tax-advantaged retirement account.
Retirement contribution calculatorSE tax is only part of what you owe — federal (and usually state) income tax applies to your profit too. Estimate your income tax to see your total federal liability and what to set aside.
Federal income tax calculatorWorked scenarios with the full analysis, so you can see how the numbers move before entering your own.
A typical full-time self-employed earner below the Social Security wage cap.
Self-employment tax
$11,304
Self-employment tax applies to 92.35% of your $80,000 profit — that's $73,880 of net earnings. On it you owe $9,161 for Social Security and $2,143 for Medicare, a combined $11,304. This is separate from and on top of federal income tax. Uses 2025 rates.
You can deduct $5,652, half your SE tax, against your income tax as an above-the-line deduction. It doesn't reduce the SE tax itself, but it lowers your taxable income, softening the overall bite. Employees split Social Security and Medicare with their employer; the self-employed pay both halves, which is why this deduction exists.
Estimate your income taxNo employer withholds this for you, so the IRS expects quarterly estimated payments. Setting aside roughly $2,826 every quarter for SE tax alone — plus more for income tax — avoids a large bill and underpayment penalties at tax time. A common rule of thumb is to reserve 25–30% of profit for all taxes combined.
A part-time or side-gig income, where SE tax still applies from the first dollar of profit.
Self-employment tax
$3,532
Self-employment tax applies to 92.35% of your $25,000 profit — that's $23,088 of net earnings. On it you owe $2,863 for Social Security and $670 for Medicare, a combined $3,532. This is separate from and on top of federal income tax. Uses 2025 rates.
You can deduct $1,766, half your SE tax, against your income tax as an above-the-line deduction. It doesn't reduce the SE tax itself, but it lowers your taxable income, softening the overall bite. Employees split Social Security and Medicare with their employer; the self-employed pay both halves, which is why this deduction exists.
Estimate your income taxNo employer withholds this for you, so the IRS expects quarterly estimated payments. Setting aside roughly $883 every quarter for SE tax alone — plus more for income tax — avoids a large bill and underpayment penalties at tax time. A common rule of thumb is to reserve 25–30% of profit for all taxes combined.
A high earner above the Social Security wage base, where the SS portion caps out.
Self-employment tax
$27,193
Self-employment tax applies to 92.35% of your $200,000 profit — that's $184,700 of net earnings. On it you owe $21,836 for Social Security and $5,356 for Medicare, a combined $27,193. This is separate from and on top of federal income tax. Uses 2025 rates.
You can deduct $13,596, half your SE tax, against your income tax as an above-the-line deduction. It doesn't reduce the SE tax itself, but it lowers your taxable income, softening the overall bite. Employees split Social Security and Medicare with their employer; the self-employed pay both halves, which is why this deduction exists.
Estimate your income taxNo employer withholds this for you, so the IRS expects quarterly estimated payments. Setting aside roughly $6,798 every quarter for SE tax alone — plus more for income tax — avoids a large bill and underpayment penalties at tax time. A common rule of thumb is to reserve 25–30% of profit for all taxes combined.
A moderate profit showing how the deductible half and quarterly set-aside work at a mid-range income.
Self-employment tax
$6,358
Self-employment tax applies to 92.35% of your $45,000 profit — that's $41,558 of net earnings. On it you owe $5,153 for Social Security and $1,205 for Medicare, a combined $6,358. This is separate from and on top of federal income tax. Uses 2025 rates.
You can deduct $3,179, half your SE tax, against your income tax as an above-the-line deduction. It doesn't reduce the SE tax itself, but it lowers your taxable income, softening the overall bite. Employees split Social Security and Medicare with their employer; the self-employed pay both halves, which is why this deduction exists.
Estimate your income taxNo employer withholds this for you, so the IRS expects quarterly estimated payments. Setting aside roughly $1,590 every quarter for SE tax alone — plus more for income tax — avoids a large bill and underpayment penalties at tax time. A common rule of thumb is to reserve 25–30% of profit for all taxes combined.
Self-employment (SECA) tax is Social Security and Medicare tax for people who work for themselves. When you're an employee, you pay 7.65% for these and your employer pays a matching 7.65%. When you're self-employed, you're both — so you pay the full 15.3%, which catches many first-time freelancers by surprise.
It applies to 92.35% of your net business profit (revenue minus expenses), not to gross revenue. The Social Security portion of 12.4% applies up to an annual wage base; the Medicare portion of 2.9% has no cap. This is entirely separate from federal income tax, which you also owe on the same profit.
There's a partial offset: you can deduct half of your self-employment tax against your income tax. This deduction accounts for the 'employer half' you're effectively paying, and it lowers your taxable income — though not the SE tax itself. The calculator shows the deductible amount for your profit.
Because no employer withholds tax from your income, you're responsible for paying it yourself throughout the year via quarterly estimated payments (due in April, June, September and January). Under-paying triggers penalties. A common approach is to set aside 25–30% of every payment you receive to cover SE tax plus federal and state income tax combined.
You can't avoid SE tax on genuine self-employment income, but you can reduce what you owe overall. The most direct lever is legitimate business expenses: every deductible dollar of expense reduces your net profit, and therefore both your SE tax and income tax. Keeping clean records and claiming everything you're entitled to is the first step.
Retirement accounts help too — a SEP-IRA or Solo 401(k) allows large tax-deductible contributions that cut your income tax (though not SE tax). At higher income levels, some self-employed people form an S-corporation to pay themselves a reasonable salary and take the rest as distributions not subject to SE tax; it adds complexity and cost, so it's worth professional advice before pursuing.
New freelancers often plan only for income tax and are blindsided by an extra 15.3%. Budget for both from your first dollar of profit.
No employer withholds for you. Skipping quarterly estimates triggers underpayment penalties and a painful April bill.
Every deductible expense lowers the profit SE tax is based on. Poor records mean paying tax on income you could have offset.
Half of SE tax is deductible against income tax. Missing it overstates your income-tax liability.
SE tax plus income tax often totals 25–30%+ of profit. Setting aside too little leads to a shortfall at filing.
It's 15.3% — 12.4% for Social Security plus 2.9% for Medicare — applied to 92.35% of your net business profit. On $80,000 of profit that's about $11,300. The Social Security portion stops at an annual wage base; Medicare has no cap. This is separate from the income tax you also owe.
Multiply your net profit by 92.35% to get net earnings, then apply 12.4% (up to the Social Security wage base) plus 2.9% Medicare. The 92.35% factor accounts for the employer-half deduction. Half of the resulting SE tax is then deductible against your income tax.
Employees split Social Security and Medicare tax 50/50 with their employer, each paying 7.65%. The self-employed have no employer to share it, so they pay the full 15.3%. A deduction for half the SE tax partially offsets this, but it still means a larger payroll-tax burden than an equivalent salaried worker.
Yes. You can deduct one half of your self-employment tax as an above-the-line deduction against your income tax. It reduces your taxable income (lowering income tax) but doesn't reduce the SE tax itself. The calculator shows the deductible amount for your profit.
Through quarterly estimated tax payments to the IRS, due in April, June, September and January, since no employer withholds it for you. Set aside a portion of each payment you receive — a common guideline is 25–30% of profit for all taxes combined — to avoid a large bill and underpayment penalties.
Claim every legitimate business expense, since each reduces the net profit SE tax is based on. Retirement contributions to a SEP-IRA or Solo 401(k) cut income tax (not SE tax). At higher incomes, an S-corporation election can reduce SE tax on the portion taken as distributions, though it adds cost and complexity — get professional advice first.
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