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.
Calculated in your browser — the numbers you enter are never sent to our servers.
What it calculates: Total SE Tax Owed, Social Security Tax (12.4%), Medicare Tax (2.9%), Deductible Half of SE Tax.
Self-employment means paying both halves of Social Security and Medicare
An employee pays 7.65% of wages into Social Security and Medicare and the employer pays a matching 7.65%. Someone self-employed is both, so the combined 15.3% falls on them. On $80,000 of net profit that is $11,304 — $9,161 of Social Security and $2,143 of Medicare — and it is owed before any income tax is calculated.
SE Tax = (Profit x 92.35%) x 15.3% | Deductible Half = SE Tax / 2
The base is not the full profit. The tax applies to 92.35% of net earnings, which approximates the deduction an employer would have taken for its own half, so the $80,000 is assessed on $73,880. This is why the effective rate on profit is about 14.1% rather than the headline 15.3%.
Social Security ends at $184,500 of earnings; Medicare applies to every dollar
The 12.4% Social Security portion applies only up to the annual wage base, $184,500 for 2026. Above that, the marginal self-employment rate drops to the 2.9% Medicare component alone. The 0.9% Additional Medicare Tax then applies above $200,000 of combined earnings for a single filer, taking the top marginal rate to 3.8%.
W-2 wages use up the wage base first. Someone earning $150,000 as an employee alongside self-employment has only $34,500 of the base left, so most of their self-employment profit escapes the Social Security portion entirely. The other-income field exists for exactly this, and leaving it blank will overstate the tax for anyone with a salary beside their business.
$5,652 is deductible here — half of the Social Security and Medicare portions only
You may deduct one-half of the self-employment tax when computing adjusted gross income. It is an above-the-line deduction, so it applies whether or not you itemise, and it reduces income tax rather than the self-employment tax itself. On the default profit that is $5,652.
The 0.9% Additional Medicare Tax is deliberately excluded from this deduction. It is computed on Form 8959 and is not part of the one-half-of-SE-tax figure, so for higher earners the deductible amount is less than half of the total shown. Getting this wrong overstates the deduction exactly when the sums are largest.
Nobody is withholding, so the IRS expects $6,915 a quarter
Employees have tax withheld from every paycheque. The self-employed must send estimated payments instead, generally quarterly, covering both self-employment tax and income tax. The quarterly figure here combines the two, and underpaying triggers a penalty even if the full amount is settled by the April deadline.
The safe-harbour rules are worth knowing: paying at least 90% of the current year’s liability, or 100% of last year’s (110% for higher incomes), generally avoids the penalty regardless of how the year turns out. For a business with lumpy income that is far easier to satisfy than forecasting the year accurately, and it is the most common way self-employed filers stay clear of underpayment charges.
Federal self-employment tax, with a flat income-tax assumption on top
The self-employment tax portion follows the statutory rates and wage base. The income tax element is a flat approximation rather than a bracket calculation, and it takes no account of the standard deduction, filing status, dependants, credits, or the qualified business income deduction — which can reduce taxable business income by up to 20% and materially changes the total for many filers.
Net profit must already be net of deductible business expenses, home-office costs and health insurance premiums where they qualify. State and local taxes are excluded entirely. Entity structure matters too: an S-corporation election can change how much of the income is subject to self-employment tax at all, which is a decision worth taking with an accountant rather than a calculator.
Sources & References
Figures on this page are checked against primary, authoritative sources. Links open in a new tab.
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.
Published the calculator with its formula, worked example, assumptions, limitations and FAQs, and added an automated formula test suite covering it.
Corrected the deductible half of the self-employment tax, which had been including the 0.9% Additional Medicare Tax. That surtax is reported on Form 8959 and is not part of the one-half-of-SE-tax deduction, so the deduction was overstated for higher earners.
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