Navigating Your Taxes: The Self-Employment Tax Guide
By The Finanspilot Team | September 6, 2025
If you're a freelancer, a small business owner, or an independent contractor, you're responsible for paying your own Social Security and Medicare taxes. This is known as the **self-employment tax**. Unlike employees who have these taxes automatically withheld from their paychecks, you must calculate and pay them yourself. It can be a complex process, but our **Self-Employment Tax Calculator** is here to help simplify it.
What is Self-Employment Tax?
The self-employment tax is made up of two parts: a 12.4% tax for Social Security and a 2.9% tax for Medicare. Together, this adds up to 15.3%. When you're an employee, your employer pays half of this tax (7.65%), and you pay the other half. As a self-employed individual, you are both the employer and the employee, so you're responsible for the full 15.3%.
However, there's good news: you can deduct the employer-equivalent portion of your self-employment tax when calculating your adjusted gross income, which can lower your overall tax burden.
Using Our Self-Employment Tax Calculator
Our **Self-Employment Tax Calculator** makes it easy to estimate your tax liability. Simply input your net self-employment income (your gross income minus your business expenses). The calculator will then figure out your self-employment tax and show you the portion that is tax-deductible.
This tool is vital for:
- **Budgeting:** Helps you set aside the right amount of money for taxes so you're not caught off guard.
- **Quarterly Payments:** Provides an estimate for your quarterly tax payments, helping you stay compliant with IRS requirements.
- **Financial Planning:** Allows you to see the true cost of being self-employed and plan your finances accordingly.
Don't let tax season be a surprise. Use our calculator to understand your tax obligations and plan for a financially secure future.