What is the self-employment tax rate?

The federal self-employment tax rate is 15.3%, made up of 12.4% for Social Security and 2.9% for Medicare. It is applied to 92.35% of your net self-employment earnings. The Social Security portion stops at the annual wage base (about $168,600 for 2024); the Medicare portion has no cap.

Does Hawaii have a separate self-employment tax?

No. Hawaii does not levy a standalone self-employment tax. Instead, your net self-employment income is taxed under Hawaii's regular graduated income tax brackets (1.4% to 11%). However, self-employed people in Hawaii may also owe General Excise Tax on their business gross receipts.

Can I deduct half of my SE tax?

Yes. You can deduct one-half of your federal self-employment tax as an above-the-line adjustment to income. This reduces your adjusted gross income for both federal and Hawaii income tax purposes, which this calculator applies before computing Hawaii tax.

What is Hawaii's General Excise Tax for self-employed people?

Hawaii's General Excise Tax (GET) is generally 4% statewide, with a county surcharge bringing it to 4.5% on Oahu. Unlike a sales tax, GET applies to business gross income, including most services. This calculator estimates income and SE tax but not GET; budget separately for it.

Do I need to make estimated payments in Hawaii?

Yes. If you expect to owe $500 or more in Hawaii income tax, you generally must make quarterly estimated payments using Form N-200V. Self-employed people also typically pay federal estimated taxes quarterly to cover SE tax and federal income tax.

Hawaii Self-Employment Tax Calculator

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Self-employed people in Hawaii owe two separate taxes on their net earnings: the federal self-employment tax and Hawaii’s graduated state income tax. This calculator computes both, applies the deductible half-SE-tax adjustment, and shows your combined liability.

How it works

The federal self-employment tax is 15.3 percent — 12.4 percent for Social Security plus 2.9 percent for Medicare — applied to 92.35 percent of your net self-employment income:

SE base   = net earnings × 0.9235
SS tax    = min(SE base, $168,600) × 0.124
Medicare  = SE base × 0.029
SE tax    = SS tax + Medicare

You then deduct one-half of the SE tax as an adjustment to income. Hawaii income tax is computed on your net earnings minus that adjustment, minus your standard deduction and personal exemptions, using the twelve graduated brackets that run from 1.4 percent to 11 percent.

Example

On 80,000 dollars of net self-employment income, the SE base is 73,880 dollars. SE tax is about 11,304 dollars, of which half (5,652 dollars) is deductible. Hawaii then taxes roughly 70,348 dollars after the adjustment, deduction, and one exemption, producing several thousand dollars of state tax on top of the federal SE tax.

Notes

This tool models federal SE tax and Hawaii income tax only. It does not include federal income tax or Hawaii’s General Excise Tax on gross business receipts, which most self-employed Hawaii residents also owe. Make quarterly estimated payments if you expect to owe 500 dollars or more; see Form N-200V at tax.hawaii.gov.