Self-Employment Tax Calculator

Freelancers and 1099 contractors pay an extra 15.3% self-employment tax (Social Security + Medicare) that W-2 employees split with their employer. Enter your net self-employment income to see your total tax burden by state.

Total Tax
$25,260
29.72% effective
Take Home
$59,740
after all taxes
Quarterly Payment
$6,315
estimated

Tax Breakdown

Net Self-Employment Income$85,000
Self-Employment Tax (15.3%)
Social Security: $9,734 + Medicare: $2,276
$12,010
Federal Income Tax$8,692
California State Tax (5.36%)$4,558
Total Tax$25,260

Simplified estimate. Does not include standard deduction, itemized deductions, additional Medicare tax on income over $200K, or state-specific deductions. QBI deduction (20%) applied. Consult a tax professional for exact numbers.

Understanding Self-Employment Tax

Self-employment tax is a 15.3% levy on net self-employment income that covers Social Security (12.4%) and Medicare (2.9%). If you're a freelancer, independent contractor, gig worker, or sole proprietor earning more than $400 per year in net self-employment income, you owe this tax in addition to regular federal and state income taxes. The 15.3% rate applies to the first $168,600 of net earnings (2024), after which only the 2.9% Medicare portion continues — plus an additional 0.9% Medicare surtax on earnings above $200,000 for single filers.

The key difference from W-2 employment is who pays: when you work for an employer, the company pays half (7.65%) and you pay the other half through payroll withholding. As a self-employed individual, you pay both halves. This means a freelancer earning $100,000 pays roughly $14,130 more in employment taxes than a W-2 employee earning the same gross income. However, the IRS provides a partial offset — you can deduct the employer-equivalent portion (half of SE tax) from your adjusted gross income, which reduces your income tax liability.

There are several legitimate strategies to reduce your self-employment tax burden. The most impactful is electing S-corporation status: by paying yourself a “reasonable salary” and taking the remainder as distributions, you avoid SE tax on the distribution portion. This typically saves $5,000–$15,000 per year for six-figure earners. Other strategies include maximizing business deductions (home office, health insurance, retirement contributions), contributing to a Solo 401(k) or SEP-IRA to reduce taxable income, and timing income and expenses across tax years. The state you live in also matters significantly — in no-income-tax states like Texas or Florida, your total self-employment tax burden can be 5–9% lower than in high-tax states like California or New York.