Phase 1 · Core Sovereign Layer
Self-Employment Tax Calculator
Be your own boss and you pay both halves of FICA — 15.3% before income tax even starts. See the bite on your profit, the half you get to deduct, and the number to set aside.
Under the hood
The math, fully exposed
We apply the 92.35% factor, then the two FICA halves with the Social Security wage cap:
SE base = net profit × 0.9235
Social Security = 12.4% × SE base, up to ($176,100 − W-2 wages)
Medicare = 2.9% × SE base (+0.9% above your threshold)
Deductible half = SE tax ÷ 2, off your income before income tax
- It stacks on income tax: the 15.3% comes before federal and state income tax — the combined bill is what blindsides new freelancers.
- The wage cap is relief: once W-2 wages plus SE base pass the Social Security cap, the 12.4% portion stops and only the 2.9% Medicare remains.
- Half comes back: deducting the employer-equivalent half lowers your income tax — not the SE tax itself, but a real saving at your marginal rate.
Your directives
What to do next, based on your numbers
Adjust the sliders to generate tailored recommendations.
Answers
Frequently asked questions
What is self-employment tax and why is it 15.3%?
When you are an employee, you pay 7.65% of FICA (Social Security + Medicare) and your employer pays the other 7.65%. When you work for yourself, you are both — so you owe the full 15.3%. That is on top of regular income tax, which is why a freelancer's total tax bill shocks first-timers. The 15.3% breaks down as 12.4% Social Security (up to a wage cap) and 2.9% Medicare (no cap).
Why is the tax calculated on only 92.35% of my profit?
Because employees do not pay FICA on the employer's half of FICA, the tax code evens the playing field by letting you exclude an equivalent 7.65% — so self-employment tax applies to 92.35% of your net profit, not 100%. This calculator applies that factor automatically, so the effective rate on your profit is closer to 14.1% than a flat 15.3%.
Can I deduct any of the self-employment tax?
Yes. You deduct half of your self-employment tax — the employer-equivalent portion — from your income before calculating income tax. It does not reduce the SE tax itself, but it lowers your income-tax bill, saving you your marginal rate on that half. This tool shows both the deduction and roughly what it saves you in income tax.
How does a W-2 job change my self-employment tax?
Social Security tax stops at an annual wage cap (about $176,100 in 2025). If a W-2 job has already used up part or all of that cap, your self-employment income owes less — or no — Social Security tax, though the 2.9% Medicare portion always applies. Enter your W-2 wages and watch the Social Security portion shrink as you approach the cap. This is an educational model, not tax advice.