Self Employed Tax Calculator

Two separate taxes. Self-employment tax is 15.3% on 92.35% of your net profit — 12.4% for Social Security up to the $184,500 wage base and 2.9% for Medicare with no ceiling. On top of that you owe federal income tax on your profit at ordinary rates. A common rule of thumb is to set aside 25–30% of profit, but the calculator above gives a figure for your actual numbers.

15.3% — 12.4% Social Security plus 2.9% Medicare. It applies to 92.35% of net earnings, not 100%, because you get to subtract the employer-equivalent portion first. High earners add 0.9% Additional Medicare Tax above $200,000 single or $250,000 joint.

Because you are paying both halves of FICA. An employee pays 7.65% and the employer quietly pays the other 7.65%. When you work for yourself there is no employer, so both halves land on you. Half of the self-employment tax is deductible against your income tax, which softens it a little.

A 1099 rate has to be higher than an equivalent W-2 salary to come out even. You are covering the employer's 7.65% FICA share, and usually health insurance, paid leave and any retirement match too. As a starting point, many contractors add roughly 25–35% to a W-2 equivalent before considering benefits — then check the real numbers, because deductible expenses and the qualified business income deduction can move it either way.

Generally yes, if you expect to owe $1,000 or more when you file. Payments are due in April, June, September and January. Missing them triggers an underpayment penalty even if you pay in full at filing. The safe harbour is paying at least 100% of last year's tax — 110% if your prior-year AGI was over $150,000.

Ordinary and necessary business expenses: home office, equipment and software, business mileage or actual vehicle costs, professional fees, business insurance, advertising, supplies, and self-employed health insurance premiums. Deductions reduce net profit, which reduces both self-employment tax and income tax, so they are worth more to a contractor than to an employee.

A deduction of up to 20% of qualified business income for many pass-through businesses, including sole proprietors. It reduces income tax but not self-employment tax, and it phases out for some service businesses at higher incomes. This calculator does not model it, so your actual income tax may come out lower than shown.

Common 1099 write offs: home office (simplified at $5 per square foot up to 300 sq ft, or actual costs), equipment and software, business mileage, phone and internet apportioned to business use, professional fees, business insurance, advertising, supplies, continuing education, and self-employed health insurance premiums. Tax deductions for self employed workers reduce net profit, so each one cuts both self-employment tax and income tax.

No. Unlike income tax, self-employment tax has no brackets — it is a flat 15.3% on 92.35% of net profit, with the 12.4% Social Security half stopping at the $184,500 wage base. Only the income tax layered on top uses brackets. That flatness is why the self employment tax amount can feel heavy at modest profit levels.

To convert a W-2 hourly rate to a 1099 equivalent, start by adding the 7.65% employer FICA share you will now pay yourself, then add the value of any benefits you lose — health insurance, paid leave, retirement match. A $40 W-2 hour with typical benefits often needs a 1099 rate near $52–$58 to leave you in the same position.

Yes, on the self-employment profit — but your W-2 wages use up the Social Security wage base first. If your salary already exceeds $184,500, the 12.4% Social Security portion does not apply to your side income at all; only the 2.9% Medicare portion does. Enter your W-2 wages above and the calculator accounts for this.