What is the self-employment tax rate?

The federal self-employment tax is 15.3%: 12.4% for Social Security (up to the $168,600 wage base in 2024) and 2.9% for Medicare on all net earnings. It is applied to 92.35% of your net self-employment income, which accounts for the employer-equivalent portion you can deduct.

Does California have its own self-employment tax?

No. California does not levy a separate self-employment tax. Self-employment income is taxed as ordinary income under California's regular 1% to 12.3% brackets. The 15.3% SE tax is federal only, but California still taxes the underlying profit through its income tax.

What is the half-SE-tax deduction?

You can deduct one-half of your self-employment tax as an above-the-line adjustment to income on your federal return. This reduces your federal taxable income (and flows through to California AGI), partially offsetting the employer-equivalent share of the SE tax.

Why is SE tax applied to only 92.35% of income?

Employees and employers split FICA, and only the employee share is taxable wages. To put the self-employed on equal footing, the law lets you reduce net earnings by 7.65% (the employer-equivalent share) before applying the 15.3% rate, so you multiply net profit by 0.9235 first.

Do I owe the additional Medicare tax?

If your combined wages and self-employment earnings exceed $200,000 (single) or $250,000 (married filing jointly), an extra 0.9% Additional Medicare Tax applies to the amount above the threshold. This calculator includes the base 2.9% Medicare portion; high earners should add the 0.9% surtax.

California Self-Employment Tax Calculator

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California freelancers and 1099 contractors face two tax layers: the federal self-employment tax that funds Social Security and Medicare, and California’s regular income tax on the same profit. This calculator combines both and applies the deductible half-SE adjustment so the numbers reflect what you actually owe.

How it works

Self-employment tax is computed on a reduced base, then California income tax is applied on top:

SE base       = net self-employment income × 0.9235
SE tax        = 12.4% × min(SE base, $168,600 SS wage base) + 2.9% × SE base
half-SE deduction = SE tax ÷ 2
CA AGI        = net SE income + other income − half-SE deduction
CA income tax = California brackets on (CA AGI − standard deduction)

The 92.35 percent factor accounts for the employer-equivalent share you can deduct. Half of the SE tax is then subtracted before computing California income tax, since that deduction flows through to your California AGI.

Example

A freelancer with 80,000 dollars of net profit and no other income has an SE base of 73,880 dollars. SE tax is 12.4 percent up to the wage base plus 2.9 percent, totaling about 11,303 dollars. Half of that, roughly 5,651 dollars, reduces California AGI before the state’s progressive brackets apply.

Notes

This estimates federal SE tax plus California state income tax. It does not include your federal income tax, which is a separate layer, nor the 0.9 percent Additional Medicare surtax for very high earners. California has no separate self-employment tax. Verify against IRS Schedule SE and FTB Form 540 for your exact filing.