What is self-employment tax?
Self-employment tax generally funds Social Security and Medicare for people with qualifying net earnings from self-employment. It is separate from regular federal income tax.
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Why does the calculator multiply profit by 92.35%?
IRS guidance generally uses 92.35% of net self-employment profit to determine net earnings subject to self-employment tax, subject to special Schedule SE rules.
How does the Social Security wage base interact with W-2 wages?
If you already have wages subject to Social Security tax, those wages use part of the annual Social Security wage base before self-employment earnings are tested against the remaining limit.
What about Additional Medicare Tax?
Additional Medicare Tax uses filing-status thresholds and can apply to combined Medicare wages and self-employment income. It is separate from the regular 2.9% self-employment Medicare component.
Worked example: Self-Employment Tax
Enter the following values in the Self-Employment Tax Calculator and calculate to reproduce this result. This is an illustrative scenario, not a personalized recommendation or a current quote.
- Net self-employment profit: 80000
- Other Social Security/Medicare wages: 0
- Filing status: Single
Example result: $11,303.64. Estimated Social Security, Medicare and any Additional Medicare tax on qualifying net earnings from self-employment.
Calculation used: Net profit × 92.35% → Social Security + Medicare + applicable Additional Medicare Tax
How to interpret this example
This output is self-employment tax, not total income tax on a business. The calculation uses qualifying net earnings and the modeled wage-base interaction. Expenses, other wages and filing circumstances must be entered correctly for a useful estimate.
Frequently asked questions
Sources and methodology
The calculator uses the current federal figures or official agency guidance described below where those rules apply. State-specific results should always be checked with the relevant state tax authority.