What is the self-employment tax?

Self-employment tax consists of Social Security and Medicare taxes for individuals who work for themselves. Employees who receive a W-2 only pay half of the total Social Security (6.2%) and Medicare (1.45%) taxes, while their employer is responsible for paying the other half. Self-employed individuals are responsible for paying both portions of the Social Security (12.4%) and Medicare (2.9%) taxes.

Do I have to pay self-employment tax?

If you (1) are self-employed as a sole proprietorship, an independent contractor or freelancer and (2) earn $400 or more, you may need to pay SE tax. This is true even if you are paid in cash and do not receive a 1099-MISC. Keep in mind, you may be able to offset this income if you have qualifying expenses.

Your Self-Employment Income for

Enter your total self-employment income minus deductible business expenses.

$ .00

Your Employer Paid Income for

This is hourly or salaried income you earned from an employer; taxes have already been withheld.

$ .00

Your self-employment tax amount:

  • Social Security Portion:
  • Medicare Portion:

Your self-employment tax rate:

Note: Depending on your specific tax situation, you may also need to pay regular income tax. Furthermore, if your income is high enough, you may be subject to the Additional Medicare Tax.

Quarterly Estimated Taxes

Taxes must be paid on income as you earn it. If you do not pay enough tax throughout the year, you could be assessed penalties. This is true even if you get a refund at tax time.

The IRS offers multiple options for paying quarterly estimated taxes, including Direct Pay and EFTPS.

Need more tax help?

Need more help calculating your total tax liability? Try TaxAct's free Tax Calculator or signup for a TaxAct account and file your taxes online.