What is self-employment tax in the US?

Self-employment tax is a 15.3% tax on 92.35% of net self-employment earnings, comprising 12.4% Social Security (up to $184,500 for 2026) and 2.9% Medicare. Self-employed individuals pay both the employee and employer portions. 50% of SE tax is deductible from adjusted gross income.

How do I pay self-employment tax in the US?

Through quarterly estimated tax payments (Form 1040-ES) due April 15, June 15, September 15, and January 15. Underpayment may trigger a penalty. Calculate each quarter based on expected annual income or use the prior-year safe harbor method.

What business expenses can I deduct to reduce self-employment tax?

Home office (actual cost or $5/sq ft up to 300 sq ft), vehicle mileage (72.5 cents/mile for 2026), health insurance premiums (deductible from AGI not SE tax), equipment, software, professional development, business meals (50%), internet and phone (business portion).

What is the QBI deduction for self-employed individuals?

Section 199A allows eligible self-employed individuals to deduct up to 20% of qualified business income from taxable income. Phase-outs apply for service businesses above income thresholds. This deduction does not reduce SE tax, only income tax. It was made permanent by the One Big Beautiful Bill Act (2025).

Should I form an S-Corp to reduce self-employment tax?

An S-Corp allows the owner to split income between salary (subject to SE tax) and distributions (not subject to SE tax). This can save thousands for high earners, but involves added complexity and cost (payroll, separate corporate filing, reasonable compensation requirement). Worth considering above $60,000-$80,000 net profit.

Tax Calculator

Self-Employment Tax Calculator

Estimate your self-employment tax, income tax, National Insurance, and quarterly payment obligations as a freelancer or sole trader in the US, UK, Australia, or Canada.

Country / Tax System

Self-Employment (Sole Proprietor / Freelancer)

Gross Revenue ($)

Total Business Expenses ($)

Net profit = Revenue minus Expenses

Filing Status

Other Employment Income ($)

Total Tax Due

Effective Tax Rate

Quarterly Payment

Tax Breakdown

Component	Amount

Estimate only: This is a simplified estimate. Actual tax depends on all sources of income, available deductions, and local/provincial/state rates. Consult a tax professional or use official government tools for filing.

How Self-Employment Tax Works

SE Tax (US)

Self-employed individuals pay 15.3% SE tax on 92.35% of net profit — covering Social Security (12.4%) and Medicare (2.9%). Half is deductible from gross income.

Income Tax

Net profit is added to your personal income and taxed at marginal rates after deductions. The self-employment tax deduction, standard deduction, and QBI deduction all reduce taxable income.

Deductions and Offsets

Business expenses reduce net profit before any tax is calculated. Keep detailed records of all business costs — home office, vehicle, equipment, software, and professional fees are commonly claimed.

Quarterly Payments

Most self-employed individuals must pay estimated taxes quarterly rather than annually. Missing quarterly payments can trigger underpayment penalties even if the annual return is filed on time.

Frequently Asked Questions

Related Calculators

Take-Home Pay Calculator Monthly Budget Calculator

Data & sources

US self-employment figures used here (tax year 2026). The QBI deduction has income-based phase-outs for specified service businesses and does not reduce SE tax; not everyone qualifies.

US · 2026 — OASDI taxable maximum; up from $176,100 in 2025. Social Security Administration ↗ (verified 2026-08-25)
US · 2026 — 72.5 cents/mile for business use. IRS ↗ (verified 2026-08-25)
US · 2026 — 20% QBI deduction made permanent by the One Big Beautiful Bill Act (2025). IRS ↗ (verified 2026-08-25)

Figures are estimates for general information, not tax or financial advice. Rules change and individual circumstances vary — confirm with the official source or a qualified adviser before acting.