Who owes self-employment tax?

Sole proprietors, single-member LLCs (default tax treatment), and general partners on their distributive share of partnership ordinary income. S-corp shareholders do NOT owe SE tax on K-1 distributions — that's the point of the S-corp election — but they owe regular FICA on their W-2 salary.

How is the 15.3% SE tax rate calculated?

12.4% Social Security (OASDI) on net SE earnings up to the wage base ($168,600 in 2024; adjusted annually) plus 2.9% Medicare on all net SE earnings. The combined 15.3% applies after a 92.35% adjustment to your net profit (you only pay SE tax on 92.35% of profit).

What is additional Medicare tax?

A 0.9% surtax on Medicare wages and SE earnings above $200,000 (single) or $250,000 (married filing jointly). It's reported on Form 8959 and added on top of regular Medicare.

Can I deduct half of my SE tax?

Yes — half of the OASDI + regular Medicare portion (not the additional Medicare) is deductible as an adjustment to income on Form 1040. The calculator shows this 'half-of-SE-tax' deduction so you can model the AGI impact.

Free Calculator

Self-Employment Tax Calculator

Estimate Schedule SE tax — Social Security, Medicare, and additional Medicare — net of the half-of-SE-tax income adjustment.

Your situation

Self-employment tax (Schedule SE) on net business profit, including additional Medicare tax above the threshold.

Net self-employment profit$100,000

$10K$500K

Other W-2 wages this year$0

W-2 wages already paid Social Security up to the wage base; that reduces the OASDI portion of SE tax owed.

Married filing jointly (raises additional Medicare threshold to $250K)

Estimated SE tax

$14,130

owed on Schedule SE in addition to regular income tax

Social Security (OASDI) portion$11,451

Medicare portion$2,678

Half-of-SE-tax income adjustment-$7,065

Approximate quarterly estimate$3,532

Read this carefully

SE tax is separate from federal income tax. Half the SE tax (OASDI + Medicare; not the additional Medicare) is deductible against AGI. State tax is not modeled. Talk to a partner.

When SE tax becomes a serious bill

Once net SE earnings clear $80–100K above a reasonable salary, the S-corp election starts to save real money on payroll tax — at the cost of running payroll, filing a separate return, and (in California) the 1.5% S-corp tax.

See S-Corp Savings Calculator Talk to a partner