How is self-employment tax calculated in Vermont?

Self-employment tax is federal, not state. You multiply net self-employment earnings by 92.35%, then apply 12.4% Social Security (up to the wage base) and 2.9% Medicare for a combined 15.3%. Vermont then taxes your income separately using its graduated state brackets after you deduct half of the SE tax.

Does Vermont have its own self-employment tax?

No. Vermont does not levy a separate self-employment tax. The 15.3% SE tax is entirely federal and funds Social Security and Medicare. What Vermont adds is its regular state income tax on your net earnings, which this calculator includes alongside the federal SE tax.

Can I deduct half of the SE tax in Vermont?

Yes. The deductible half of your federal SE tax reduces your adjusted gross income, which also lowers your Vermont taxable income because Vermont starts from federal AGI. This calculator applies that half-SE deduction before computing the Vermont income tax.

What is the 92.35% adjustment?

The 92.35% factor (1 minus 7.65%) removes the employer-equivalent share of FICA before the SE tax is applied, so the self-employed are not taxed on the portion an employer would normally cover. You apply the 12.4% and 2.9% rates to this reduced base, not to your full net profit.

Does this include federal income tax?

No. This tool covers the federal self-employment tax and Vermont state income tax only. It does not calculate your regular federal income tax, which is separate and depends on your full income, deductions, and credits. Budget for that on top of the figures shown here.

Vermont Self-Employment Tax Calculator

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If you freelance or run a business in Vermont, you owe two taxes on your earnings: the 15.3% federal self-employment tax that funds Social Security and Medicare, and Vermont’s graduated income tax. This calculator runs both — applying the standard Schedule SE adjustments — so you can see your combined liability and effective rate.

How it works

The federal SE tax starts from an adjusted base:

SE base = Net earnings × 92.35% SE tax = 12.4% (Social Security, up to the wage base) + 2.9% (Medicare) + 0.9% additional Medicare above the threshold

Half of the SE tax is deductible, which lowers your Vermont taxable income:

Vermont taxable = Net − ½ SE tax − VT standard deduction − Personal exemption Vermont tax = graduated 3.35% / 6.6% / 7.6% / 8.75% brackets

Vermont specifics

No separate state SE tax — the 15.3% is purely federal.
Half-SE deduction flows through to Vermont because the state begins from federal AGI.
Vermont brackets for 2024 run from 3.35% to 8.75%, after the VT standard deduction ($7,000 single / $14,050 married) and a personal exemption (~$4,850 per filer).

Worked example

A single Vermont freelancer with $80,000 net profit:

SE base = 80,000 × 0.9235 = $73,880
SE tax = 73,880 × 15.3% ≈ $11,304 (half ≈ $5,652 deductible)
Vermont taxable ≈ 80,000 − 5,652 − 7,000 − 4,850 = $62,498
Vermont tax ≈ $45,400 × 3.35% + remainder × 6.6% ≈ $2,654
Combined SE + VT ≈ $13,958 before regular federal income tax

Note: This covers federal SE tax and Vermont income tax only. Your regular federal income tax is separate. Verify current figures at irs.gov and tax.vermont.gov.