How is self-employment tax calculated?

First, multiply your net profit by 92.35% to get net earnings from self-employment. Then apply 12.4% for Social Security on those earnings up to the $176,100 wage base and 2.9% for Medicare on all of them — a combined 15.3% on most income. Half of the SE tax is then deductible against your income tax.

Does Maryland have a separate self-employment tax?

No. Self-employment tax is federal — it funds Social Security and Medicare. Maryland does not levy its own SE tax, but it does tax your self-employment profit through the regular state income tax and the county local income tax. This calculator adds the federal SE tax and the Maryland state and local income tax on the same profit.

What does the 92.35% adjustment do?

Employees split FICA with their employer, so the self-employed get a parallel break: only 92.35% of net profit is subject to SE tax. This removes the employer-equivalent share before the 15.3% rate is applied, so SE tax is slightly less than 15.3% of your full profit.

How do W-2 Social Security wages affect SE tax?

Social Security tax only applies up to the annual wage base ($176,100 in 2025). If you also have a W-2 job, those wages already used part of that base, so the Social Security portion of your SE tax only applies to the remaining room. Entering your W-2 Social Security wages prevents the calculator from double-taxing income above the cap.

Is this tax estimate exact?

No, it is a planning estimate. It computes federal SE tax and Maryland state and local income tax on your profit, including the half-SE-tax deduction and Maryland's standard deduction. It does not include federal income tax, exemptions, credits, the 0.9% additional Medicare surtax, or the qualified business income deduction. Confirm with a tax professional before making estimated payments.

Maryland Self-Employment Tax Calculator

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This calculator estimates the total tax a self-employed Maryland resident owes on their business profit: the federal self-employment tax plus Maryland’s state and county income tax. It is built for freelancers, contractors, and 1099 workers planning quarterly estimated payments.

How it works

Self-employment tax is the self-employed version of FICA:

net SE earnings = net profit × 0.9235
Social Security = 12.4% × (earnings up to the $176,100 wage base, less W-2 SS wages)
Medicare        = 2.9% × all net SE earnings
SE tax          = Social Security + Medicare

Half of the SE tax is deductible when computing income tax. Maryland income tax then applies to your profit minus that half-SE deduction and the Maryland standard deduction, run through the 2%–5.75% state brackets, with your county’s flat local tax (2.25%–3.20%) on the same taxable base.

Total tax = Federal SE tax + Maryland state tax + County local tax

Why Maryland is different

Many self-employment calculators stop at the federal SE tax. In Maryland that understates your bill substantially, because the county local income tax adds roughly 2.25% to 3.20% of taxable income on top of the state tax. Including it — and the half-SE-tax deduction that lowers your income-tax base — gives a realistic number for setting aside money and making quarterly payments.

Example

A freelancer with $60,000 net profit, single, in Montgomery County (3.20%), no W-2 wages:

Net SE earnings = $60,000 × 0.9235 = $55,410
SE tax = 15.3% × $55,410 ≈ $8,478
Half-SE deduction ≈ $4,239
Maryland state + local tax on (~$55,800 after deductions) ≈ $4,400
Total tax ≈ $12,900, or about $3,225 per quarter

Note: This excludes federal income tax, credits, and the QBI deduction. Use it to plan estimated payments and confirm with a tax professional.