How to Calculate Self-Employment Tax
Social Security, Medicare and quarterly estimates for freelance income.
How this number is built
Calculating it yourself
Step 1
Total business revenue and subtract every legitimate deductible expense.
Step 2
Apply the 92.35% factor, which excludes the employer-equivalent portion.
Step 3
Cap the Social Security portion at the annual wage base, counting W-2 wages first.
Step 4
Deduct half of the self-employment tax when computing income tax.
Step 5
Divide the total by four and set that aside each quarter.
What people ask next
Why 92.35%?
It approximates the employer half of payroll tax, which an employee would never have paid on their own wages.
Does an S-corp election help?
It can reduce the SE tax base by splitting salary and distributions, but it adds payroll filings and a reasonable-salary requirement.
Searches this page answers
| Related search | Goes to |
|---|---|
| self employment tax | Self-Employment Tax Calculator |
| how to calculate self-employment tax | Self-Employment Tax Calculator |
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