What is the self-employment tax rate?

The federal self-employment tax is 15.3 percent: 12.4 percent for Social Security on net earnings up to the annual wage base and 2.9 percent for Medicare with no ceiling. It replaces the payroll taxes an employer would normally split with you.

How is the SE tax base calculated?

You pay SE tax on 92.35 percent of your net profit, not the full amount. This adjustment accounts for the employer-equivalent portion of the tax that an ordinary employee would not pay on their own wages.

Can I deduct part of the SE tax?

Yes. You deduct one half of your self-employment tax as an above-the-line adjustment to income, which lowers the income subject to federal and Oregon income tax. This estimator applies that deduction before computing Oregon tax.

Does Oregon have a separate self-employment tax?

Oregon has no standalone self-employment tax. Your net self-employment earnings are simply added to your taxable income and taxed under Oregon's graduated brackets of 4.75 percent, 6.75 percent, 8.75 percent, and 9.9 percent.

Do I need to pay estimated taxes?

Usually yes. Self-employed Oregonians typically owe quarterly estimated payments to both the IRS and Oregon to cover SE tax and income tax, since no employer withholds for them. Underpaying can trigger penalties.

Oregon Self-Employment Tax Calculator

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Working for yourself in Oregon means you owe federal self-employment tax on top of regular income tax. The self-employment tax funds Social Security and Medicare, which an employer would otherwise share with you. This calculator combines that federal SE tax with Oregon’s state income tax.

How it works

Self-employment tax applies to 92.35 percent of your net profit. The rate is 15.3 percent, split into Social Security and Medicare:

SE base   = net profit x 0.9235
SE tax    = 12.4% on SE base up to the Social Security wage base
          + 2.9% on all SE base (Medicare)
half SE   = SE tax / 2  (deducted from income)

You then deduct half your SE tax before computing income tax. Oregon taxes the remaining net earnings using its graduated brackets — 4.75 percent, 6.75 percent, 8.75 percent, and 9.9 percent — stacked on any other income you enter.

Example

A freelancer with 60,000 dollars of net profit has an SE base of 60,000 x 0.9235 = 55,410 dollars. SE tax is 55,410 x 15.3% = about 8,478 dollars, half of which (4,239 dollars) is deductible. Oregon then taxes roughly 55,761 dollars of earnings at its graduated rates.

Notes

This is a simplified model. It does not include the federal income tax on your profit, the qualified business income deduction, the Social Security wage base changing each year, or Oregon’s standard deduction and credits. Use it for planning and confirm with irs.gov and oregon.gov/dor.