Self-Employment Tax Calculator

How Self-Employment Tax Works

If you work for yourself as a freelancer, independent contractor, sole proprietor, or single-member LLC, you are responsible for paying self-employment (SE) tax in addition to regular income tax. Unlike traditional employees who split payroll taxes with their employer, self-employed individuals pay both the employer and employee portions.

The self-employment tax rate for 2025 is 15.3% of your net self-employment earnings. This rate is composed of two parts: 12.4% for Social Security (officially known as Old-Age, Survivors, and Disability Insurance, or OASDI) and 2.9% for Medicare (Hospital Insurance). Together, these fund the same programs that traditional W-2 employees contribute to through payroll withholding, but at double the rate since there is no employer to cover half.

Before computing your SE tax, the IRS requires you to multiply your gross self-employment income by 92.35% (0.9235). This multiplier effectively gives you the employer-equivalent deduction up front, reducing your taxable SE earnings. For example, if you earned $100,000 in net self-employment income, your net SE earnings would be $92,350. The Social Security portion applies only up to the wage base limit of $176,100 for 2025. Any earnings above that threshold are exempt from Social Security tax but still subject to Medicare tax. High earners face an additional 0.9% Medicare surtax on earnings that exceed $200,000 for single filers or $250,000 for married couples filing jointly.

One important benefit for the self-employed is the 50% SE tax deduction. You may deduct half of your total self-employment tax when calculating your adjusted gross income (AGI). This deduction is claimed on your Form 1040 and reduces the income that is subject to federal (and in many cases state) income tax. It does not reduce your SE tax itself, but it lowers the income tax you owe on top of it. Understanding this deduction is critical to accurately estimating your total tax burden.

Federal vs State Tax Obligations

Self-employed workers face a dual tax obligation: federal taxes administered by the IRS and state taxes administered by their state's department of revenue. At the federal level, every self-employed individual pays the same SE tax rates regardless of where they live. However, state income taxes vary dramatically from state to state, creating significant differences in the total tax burden depending on your location.

Nine states impose no state income tax at all: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. If you are self-employed in one of these states, your only obligation is the federal SE tax plus federal income tax. This can result in thousands of dollars in savings compared to high-tax states. On the other end of the spectrum, states like California, New York, New Jersey, and Oregon have top marginal rates exceeding 9%, substantially increasing the total tax bill for high-earning self-employed individuals.

Many states also have their own standard deductions, personal exemptions, and bracket structures that differ from federal rules. Some states use a flat tax rate (such as Colorado, Illinois, and Indiana), while others have progressive brackets similar to the federal system. A few states offer special deductions or credits specifically for self-employed workers, making it essential to understand your state's specific rules. Use this calculator to see exactly how your state's tax structure affects your bottom line.

Frequently Asked Questions

Self-Employment Tax by State

Select your state below for a detailed tax breakdown with pre-computed examples at multiple income levels, state-specific deductions, quarterly payment guidance, and more.