How is federal self-employment tax calculated?

First your net profit is multiplied by 92.35% to get net earnings from self-employment. That figure is taxed at 15.3% — 12.4% for Social Security (up to the $168,600 wage base for 2024) plus 2.9% for Medicare with no cap.

Does Pennsylvania allow the half-SE-tax deduction?

No. The federal return lets you deduct half of your SE tax against income, but Pennsylvania does not recognize that adjustment. PA taxes your full net business profits at the flat 3.07% rate with no SE-tax deduction.

What rate does Pennsylvania charge on self-employment income?

Pennsylvania taxes net profits from a business or profession at the same flat 3.07% personal income tax rate as wages. There are no brackets, deductions, or exemptions at the state level.

Is there an additional Medicare tax for high earners?

Yes. An extra 0.9% Additional Medicare Tax applies to self-employment earnings above $200,000 (single) or $250,000 (married filing jointly). This calculator includes the base 15.3% SE tax; verify the additional 0.9% if your income is high.

Do I also owe local Earned Income Tax in Pennsylvania?

Often yes. Many PA municipalities levy a local Earned Income Tax (commonly ~1%) on net profits in addition to the state 3.07%. This estimate covers federal SE tax and PA state tax; check your local rate separately.

Pennsylvania Self-Employment Tax Calculator

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The Pennsylvania Self-Employment Tax Calculator combines the two taxes a Pennsylvania freelancer, contractor, or sole proprietor owes on business profit: the federal self-employment (SE) tax that funds Social Security and Medicare, and Pennsylvania’s flat 3.07% state income tax on net profits. Because PA does not allow the federal half-SE-tax deduction, the state portion is calculated on your full profit.

How it works

Federal SE tax. The IRS first reduces your net profit by the employer-equivalent share, then applies the combined Social Security and Medicare rate:

Net earnings = net profit x 0.9235
Social Security = min(net earnings, $168,600) x 0.124
Medicare = net earnings x 0.029
Federal SE tax = Social Security + Medicare

The combined rate is 15.3% on earnings below the Social Security wage base ($168,600 for 2024); above that only the 2.9% Medicare portion continues. Half of the SE tax is deductible on your federal income tax return.

Pennsylvania state tax. Pennsylvania taxes net business profits at its flat 3.07% rate and does not honor the half-SE-tax deduction:

PA state tax = net profit x 0.0307

The calculator sums the federal SE tax and the PA state tax to show your combined burden.

Tips and notes

Pay quarterly. Both federal SE tax and PA tax are usually paid via estimated quarterly payments to avoid underpayment penalties.
Local EIT may apply. Most PA municipalities add a local Earned Income Tax (often ~1%) on net profits — budget for it on top of the figures here.
High earners: an extra 0.9% Additional Medicare Tax applies above $200,000 (single) / $250,000 (joint); this tool shows the base 15.3% SE tax.
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