Self‑Employment Tax Calculator 2025
Understanding Self‑Employment Tax in 2025
Self‑employment tax covers the Social Security and Medicare taxes that employees normally pay through payroll withholding. As a self‑employed individual you are responsible for both the employee and employer portions, which together total 15.3 % of your net earnings.
Key Components
- Net Earnings Adjustment: The IRS allows you to deduct the "employer" portion of the tax before calculating the tax itself. Net earnings are therefore
gross income × 0.9235. - Social Security Tax (12.4 %): Applied only to earnings up to the Social Security wage base. For 2025 the wage base is $168,600.
- Medicare Tax (2.9 %): Applied to all net earnings with no cap.
- Additional Medicare Tax (0.9 %): Applies to earnings above $200,000 for single filers (the threshold can be adjusted for married filing jointly).
How the Calculator Works
- Enter your gross self‑employment income.
- The calculator converts it to net earnings using the 0.9235 factor.
- Social Security tax is calculated on the lesser of net earnings or the wage‑base limit.
- Medicare tax is calculated on the full net earnings.
- If net earnings exceed the additional Medicare threshold, the extra 0.9 % is added.
- The total self‑employment tax is displayed in dollars.
When to Use This Calculator
Use this tool when estimating quarterly estimated tax payments, preparing your annual tax return, or evaluating the tax impact of a new freelance contract. Accurate self‑employment tax estimates help you avoid penalties and ensure you set aside enough cash flow for tax obligations.
Example Calculation
Suppose you earned $85,000 in 2025:
- Net earnings = 85,000 × 0.9235 = $78,497.50
- Social Security tax = min(78,497.50, 168,600) × 12.4 % = $9,733.71
- Medicare tax = 78,497.50 × 2.9 % = $2,276.43
- Additional Medicare tax = 0 (earnings below $200,000)
- Total self‑employment tax = $12,010.14
The calculator will produce the same result when you input $85,000.