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.
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.
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.