SE tax + income tax on your freelance profit — and the quarterly payment that covers it
| Line | Amount |
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Self-employment tax is the shock in every freelancer's first spring: 15.3% off the top before income tax even starts — because you're now both employee and employer for Social Security and Medicare. This calculator runs the whole stack the way Schedule SE does: the 92.35% base, the Social Security cap, the deductible half, the 20% QBI deduction most independent workers qualify for, and finally income tax — ending with the only number you need on a sticky note: the quarterly payment.
| Layer | Rate | On what |
|---|---|---|
| Social Security (both halves) | 12.4% | 92.35% of profit, up to the $176,100 wage base (W-2 wages use it up first) |
| Medicare (both halves) | 2.9% (+0.9% over $200k) | 92.35% of profit, uncapped |
| Income tax | Your brackets | Profit − half of SE tax − QBI deduction − standard deduction |
The two softeners built into the law: the 92.35% base (approximating what an employer's share would have removed) and the deductible half of SE tax — you pay both halves but deduct one from income tax. With the QBI deduction (20% of qualified profit), a $60,000-profit freelancer's effective federal rate lands near 20–23%, not the 35% panic-math suggests.
SE tax applies to net profit, so every legitimate business expense saves both layers (~30–40 cents per dollar): home office, mileage at the IRS rate, equipment, software, health-insurance premiums (a special above-the-line deduction for the self-employed), and — the heavyweight — solo retirement plans: a Solo 401(k) shelters up to $23,500 employee-side plus ~20% of profit employer-side; a SEP-IRA up to 20% of net SE income. High-profit freelancers routinely shelter $30–60k/yr.
Above roughly $80–100k of consistent profit, electing S-corp taxation lets you split income into salary (SE-taxed) and distributions (not) — saving ~15.3% on the distribution slice, minus payroll costs, a "reasonable salary" requirement, and extra filings. Below that threshold, the overhead eats the savings; above it, it's a conversation worth having with a CPA.
Employees' other 7.65% is paid invisibly by employers. Self-employed, you're both parties — but you deduct the employer half, and your rates fund the same Social Security credits toward retirement and disability benefits.
Yes, from $400 of annual net profit — the lowest threshold in the tax code. Below your income-tax filing threshold you may owe SE tax even when you owe no income tax.
Your W-2 wages consume the Social Security cap first — freelance profit above the combined $176,100 base pays only the 2.9% Medicare portion. The calculator's W-2 field applies this automatically; high-earners' side gigs are taxed lighter than they fear.
An interest-based penalty (~8% annualized on the shortfall) — annoying, not catastrophic. The bigger danger is spending the tax money: the set-aside account habit matters more than perfect quarterly timing.
Yes — self-employed health insurance is an above-the-line deduction against income tax (not SE tax) for you, spouse and dependents, as long as you're not eligible for employer coverage elsewhere.
A single-member LLC is taxed identically to a sole proprietor — the LLC is liability protection, not tax strategy. The tax fork is the S-corp election, worth evaluating from ~$80-100k of steady profit.
Yes — every figure computes locally in your browser.
The freelancers who thrive treat taxes as a subscription, not a surprise: a percentage auto-saved from every payment, four calendar reminders, and this calculator each January and June. The 15.3% never gets smaller, but it stops being scary the day it's pre-funded.