Self-Employment Tax 2025: How Much Freelancers Owe and How to Calculate It

If you are self-employed, a freelancer, or an independent contractor, you pay Social Security and Medicare tax yourself, and it is higher than what a regular employee pays. This is called self-employment tax.

Why Self-Employment Tax Is 15.3%

Employees split payroll tax with their employer: the employee pays 6.2% for Social Security and 1.45% for Medicare, and the employer matches it. When you are self-employed you are both the employee and the employer, so you pay both halves:

• Social Security: 12.4%
• Medicare: 2.9%
• Combined: 15.3%

An extra 0.9% Medicare tax applies to income above $200,000 for single filers.

The 92.35% Rule

You do not pay self-employment tax on all of your profit. The IRS treats 7.65% of your net earnings as the employer's share and excludes it, so only 92.35% of your net profit is taxed.

Example: net profit of $80,000. The taxable amount is 80,000 x 0.9235 = $73,880. Multiply by 15.3% and your self-employment tax is about $11,304.

Social Security Has a Wage Base

The 12.4% Social Security portion only applies up to an annual wage base (for 2025 it is $176,100). Earnings above that are not subject to the Social Security part, but the 2.9% Medicare part continues with no limit.

You Can Deduct Half

You can deduct half of your self-employment tax as an adjustment to income on your return. This lowers your taxable income, and therefore your income tax, which softens the total bill.

Estimate It in Seconds

Use the free Self-Employment Tax Calculator. Enter your net self-employment profit and it shows:

• The taxable share of your profit (92.35%)
• The Social Security and Medicare portions separately
• The 0.9% extra Medicare tax above $200,000 if applicable
• The deductible half you can claim

Self-Employment Tax vs Income Tax

These are two different taxes and you generally owe both. Self-employment tax funds Social Security and Medicare, while income tax is calculated separately on your taxable income. Estimate your income tax with the US Income Tax Calculator, and see your total take-home with the US Paycheck Calculator.

All US Tax Tools in One Place

The US Tax Calculators hub collects the income tax, self-employment tax and paycheck calculators so you can plan your full tax picture.