Finance calculator
Calculate self-employment tax, the deductible half, and your quarterly estimated tax payments for 2026.
Business revenue minus deductible expenses.
W-2 wages from employer (affects SS wage base).
Total SE Tax Owed
$11,304
Formula verified 9 September 2026
Social Security Tax (12.4%)
$9,161
Medicare Tax (2.9%)
$2,143
Deductible Half of SE Tax
$5,652
Est. Quarterly Tax Payment
$6,915
Estimate only — not financial advice; lender terms, fees, and taxes vary. Read the full disclaimer ↓
How your net profit becomes self-employment tax, component by component, using the same 2026 logic as the calculator above. Social Security applies up to the $184,500 wage base; Medicare has no cap.
| Item | Amount |
|---|---|
| Net self-employment profit | $80,000 |
| SE tax base (92.35% of profit) | $73,880 |
| Social Security tax (12.4%) | $9,161 |
| Medicare tax (2.9%) | $2,143 |
| Total self-employment tax | $11,304 |
| Deductible half of SE tax | $5,652 |
Estimates only — not financial, tax, or professional advice.
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What it calculates: Total SE Tax Owed, Social Security Tax (12.4%), Medicare Tax (2.9%), Deductible Half of SE Tax.
Updated 5 June 2026 · Transparent assumptions
SE tax = SS (12.4%) + Medicare (2.9%) = 15.3% on 92.35% of net profit.
$80,000 net SE profit, no W-2 wages.
SE Base (92.35%)
$73,880
SS Tax (12.4%)
$9,161
Medicare (2.9%)
$2,143
Total SE Tax
$11,304
Deductible Half
$5,652
Quarterly Est.
~$6,915
You owe $11,304 in SE tax and can deduct $5,652 of it, lowering the income subject to federal income tax. The quarterly estimate of about $6,915 bundles the SE tax with a rough 22% income-tax estimate, split across four payments.
Social Security and Medicare are funded by a 15.3% tax — 12.4% for Social Security and 2.9% for Medicare. An employee never feels the full weight of it: they have 7.65% withheld from their paycheck and their employer quietly pays the matching 7.65% on top. When you work for yourself you are both the worker and the employer, so you owe both halves. That is the entire reason self-employment tax exists, and why a freelancer earning the same as a salaried friend owes noticeably more in payroll-type tax.
On $80,000 of net profit, the calculator shows $11,304 of self-employment tax — and this sits on top of any regular income tax on the same profit. Conflating the two is the most expensive misunderstanding here: income tax and self-employment tax are separate bills levied on the same dollars, so setting aside only enough for one leaves a shortfall at filing time.
The 15.3% is not applied to your full profit. First, net profit is multiplied by 92.35% (that is, reduced by 7.65%) to form the SE tax base — $80,000 becomes $73,880. This adjustment mirrors the fact that an employer’s share of payroll tax is not itself counted as the employee’s taxable wages, so the law gives the self-employed a parallel reduction before the rate is applied. Applying 15.3% to the full $80,000 instead of the $73,880 base is a common error that overstates the tax.
There is a second offset. You may deduct one half of your self-employment tax — $5,652 in the example — when figuring your income tax. This is important to read correctly: it does not reduce the SE tax itself, which you still owe in full. It reduces the income your federal income tax is calculated on, recreating the employer-half deduction a business gets. So the SE tax line stays at $11,304, but your income-tax bill is computed on a slightly smaller number.
The two components behave differently as income rises, which is why the breakdown table matters. The 12.4% Social Security portion applies only up to an annual wage base — $184,500 for 2026 — and any profit above that ceiling escapes it entirely. The 2.9% Medicare portion has no cap and runs on every dollar, with an extra 0.9% Additional Medicare Tax stacking on once combined earnings pass $200,000.
For the $80,000 default this distinction is invisible, because the whole $73,880 base sits below the ceiling and is taxed at the full 15.3%. But cross $184,500 and your marginal SE rate effectively drops to 2.9% (plus the surtax) on the excess, because Social Security stops. If you also draw W-2 wages, those wages use up part of the Social Security ceiling first — which is why this tool asks for them. The wage base is raised most years, so always confirm the current figure with the IRS.
Employees have tax withheld automatically; the self-employed generally do not, so the system expects estimated payments four times a year. Skipping them can trigger underpayment penalties even if you pay in full at filing. The calculator’s quarterly figure — about $6,915 on the defaults — bundles the SE tax with a rough income-tax estimate and splits the total across four payments, which is why the most reliable habit is to move a fixed share of every client payment into a separate tax account as you earn it.
Treat the income-tax portion of that quarterly number as a placeholder. It applies a flat 22% to approximate income tax, but your real rate depends on total income, deductions, credits, and filing status, so the actual figure can be higher or lower. Legitimate business deductions are the main lever in your control: every dollar they shave off net profit reduces both the SE tax and the income tax. Tax rules vary by year and jurisdiction — treat this as an educational estimate rather than tax advice, and confirm your obligations with the IRS or a qualified tax professional.
Employees pay 7.65% in Social Security and Medicare taxes, and employers pay a matching 7.65%. When you work for yourself you cover both halves, which adds up to 15.3%. It is applied to 92.35% of net profit to mirror the employer-side deduction.
The law lets you reduce net profit by 7.65% before calculating SE tax, which roughly mirrors the employer half that a salaried worker would not be taxed on. Multiplying profit by 0.9235 produces that adjusted base.
You can deduct one half of your self-employment tax when figuring your income tax. It does not reduce the SE tax itself, but it lowers the income that your federal income tax is calculated on, easing the overall burden.
If you expect to owe a meaningful amount and have no withholding covering it, the tax system generally expects estimated payments four times a year. Skipping them can lead to underpayment penalties, so many self-employed people set the money aside as they earn it.
Social Security tax applies only up to an annual income ceiling, which is $184,500 for 2026. Profit above that ceiling is not subject to the 12.4% Social Security portion, though the 2.9% Medicare portion continues with no cap. The ceiling is raised most years, so confirm the current figure with the IRS.
No. The quarterly estimate here applies a flat 22% to approximate income tax, but your real rate depends on your total income, deductions, credits, and filing status. Treat it as a starting point and refine it with your full tax picture.
Figures on this page are checked against primary, authoritative sources. Links open in a new tab.
Tax disclaimer
Tax rules vary by country, state, tax year, filing status, income type, deductions, and exemptions. This calculator is educational and uses the values you enter. Always verify final tax treatment with official sources or a qualified tax professional.
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Published 9 September 2026