Self-Employment Tax Calculator (2024)

When you work as a W-2 employee, your employer pays half of your Social Security and Medicare taxes (7.65%), and you pay the other half through payroll deductions. As a self-employed individual, you are both the employer and employee — so you pay the full 15.3%.

The 15.3% breaks down into two components: 12.4% for Social Security (capped at the wage base of $168,600 in 2024) and 2.9% for Medicare (no income cap). If your earnings exceed $200,000 ($250,000 married filing jointly), you also pay an additional 0.9% Medicare surtax.

The IRS applies SE tax to 92.35% of your net self-employment income rather than 100%. This adjustment simulates the fact that employers don't pay FICA tax on the employer's share of FICA — it reduces your taxable base slightly.

You can deduct the employer-equivalent portion (50%) of your self-employment tax when calculating your adjusted gross income (AGI). This is reported on Schedule SE and transferred to Form 1040.

This deduction reduces your income tax but does not reduce your self-employment tax itself. For example, if your SE tax is $7,650, you can deduct $3,825 from your AGI, which might save you $840-$1,415 in income tax depending on your bracket.

FICA (Federal Insurance Contributions Act) and self-employment tax fund the same programs — Social Security and Medicare. The difference is who pays:

• FICA: Split 50/50 between employer (7.65%) and employee (7.65%). Total: 15.3%.
• SE Tax:You pay the full 15.3% because you're both employer and employee. But you get to deduct half.

The net cost is slightly less than 15.3% because of the 92.35% adjustment and the half-deduction. Your effective SE tax rate ends up around 14.1% of net income.

For the full comparison — what FICA funds, which halves each worker pays, and the rate table side by side — see FICA tax explained.