How is self-employment tax calculated?

Self-employment tax applies to 92.35% of your net profit. On that base, Social Security tax is 12.4% up to the annual wage base ($168,600 in 2024) and Medicare is 2.9% with no cap, for a combined 15.3% below the wage base. High earners pay an extra 0.9% Additional Medicare above $200,000 single or $250,000 married-joint.

Why is only 92.35% of my profit taxed for SE tax?

The 92.35% factor (which is 100% minus 7.65%) approximates the employer-side payroll tax that a regular employee wouldn't pay on, putting the self-employed on roughly equal footing with employees whose employer covers half of FICA. It is applied before the Social Security and Medicare rates.

Can I deduct part of my self-employment tax?

Yes. One half of your self-employment tax is an above-the-line deduction that reduces the income on which your income tax is calculated. This calculator subtracts half of the SE tax before applying Delaware's income tax brackets, just as Schedule SE and your Form 1040 would.

Does Delaware tax self-employment income differently?

Delaware does not have a separate self-employment levy; your net self-employment profit flows into your Delaware taxable income and is taxed under the same progressive brackets (0% to 6.6%) as wages. The federal SE tax is separate and goes to Social Security and Medicare, not to Delaware.

Does this include federal income tax?

No. This tool computes the federal self-employment tax and the Delaware state income tax. It does not calculate your federal income tax, which uses separate federal brackets and the standard deduction. Combine this result with a federal income tax calculator to estimate your total annual tax bill and quarterly estimates.

Delaware Self-Employment Tax Calculator

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The Delaware Self-Employment Tax Calculator combines the two taxes a Delaware freelancer or sole proprietor owes on net profit: the federal self-employment tax (Social Security and Medicare) and Delaware state income tax. Because the self-employed cover both halves of FICA, the SE tax is a major line item, and getting the half-SE deduction right matters for the Delaware portion too.

How it works

The calculation mirrors Schedule SE and Delaware Form 200-01:

SE earnings base — multiply net profit by 92.35%. This adjustment offsets the employer-side payroll tax a regular employee wouldn’t pay.
Social Security — 12.4% on the SE base, up to the $168,600 wage base. Any W-2 wages you already earned this year use up part of that base, so the tool subtracts them.
Medicare — 2.9% on the entire SE base, with an extra 0.9% above $200,000 single / $250,000 married-joint.
Half-SE deduction — half of the total SE tax is subtracted from income before the Delaware income tax is applied.
Delaware income tax — the remaining income, less the standard deduction, runs through Delaware’s 0%–6.6% brackets, minus a $110 credit per exemption.

Example

On $80,000 of net profit, the SE base is 80,000 × 0.9235 = $73,880. SE tax is about $11,304 (12.4% + 2.9%). Half of that, $5,652, is deductible, leaving roughly $74,348 before the Delaware standard deduction. Delaware tax on the remainder is in the low thousands, so the combined effective rate lands around the high teens — much of it the federal SE tax.

Notes

This tool covers SE tax and Delaware state income tax only. Federal income tax is separate and uses its own brackets and standard deduction. Self-employed Delawareans typically owe quarterly estimated payments to both the IRS and the Delaware Division of Revenue — use this estimate to size those payments, then confirm with your actual returns.