Why is self-employment income multiplied by 0.9235?

The IRS multiplies net earnings by 92.35% before applying SE tax to mirror how employees are not taxed on the employer half of FICA. This adjustment effectively excludes the employer-equivalent portion, so SE tax is charged on the reduced base.

What is the self-employment tax rate?

The combined rate is 15.3%, made up of 12.4% for Social Security on earnings up to the annual wage base ($168,600 for 2024) and 2.9% for Medicare with no cap. High earners pay an extra 0.9% Medicare above $200,000 single or $250,000 joint.

Can I deduct part of my self-employment tax?

Yes. You can deduct one half of your SE tax as an above-the-line adjustment. This calculator subtracts that half before computing your Virginia income tax, which lowers your state taxable income just as it lowers federal AGI.

How does Virginia tax self-employment income?

Virginia uses graduated brackets: 2% on the first $3,000, 3% to $5,000, 5% to $17,000, and 5.75% above $17,000 of taxable income. It applies to net self-employment income after the deductible half of SE tax and the Virginia standard deduction. There is no separate state SE tax in Virginia.

Does this include federal income tax?

No. This tool covers the federal self-employment tax and the Virginia state income tax only. Your regular federal income tax on the same income is separate and depends on your full return, brackets, and credits.

Virginia Self-Employment Tax Calculator

Email me this result

Get this tool's output sent to your inbox, plus one useful tool a week. No spam, unsubscribe any time.

If you freelance or run a business in Virginia, you owe two layers of tax on the same profit: the federal self-employment tax that funds Social Security and Medicare, and Virginia’s state income tax. This calculator computes both and totals them so you can set aside the right amount.

How it works

The federal self-employment tax is calculated on Schedule SE. First, net earnings are multiplied by 92.35 percent:

SE base = net earnings × 0.9235
SE tax  = 12.4% × min(SE base, 168,600) + 2.9% × SE base + 0.9% × (above threshold)

The 12.4 percent Social Security portion stops at the annual wage base; the 2.9 percent Medicare portion has no cap; and an extra 0.9 percent applies to high earners. One half of the SE tax is then deductible. Virginia income tax is then applied with graduated brackets to your net income after subtracting that half-SE deduction and the Virginia standard deduction ($8,500 single / $17,000 married filing jointly for 2024).

Virginia brackets

2.00% on taxable income from $0 to $3,000
3.00% on $3,001 to $5,000
5.00% on $5,001 to $17,000
5.75% on income over $17,000

Example

On 80,000 dollars of net profit, the SE base is 73,880 dollars. SE tax is 12.4% of 73,880 (9,161) plus 2.9% of 73,880 (2,143), totaling about 11,304 dollars. Half of that, roughly 5,652 dollars, is deductible. Virginia then applies its graduated brackets to the remainder after the standard deduction.

Notes

This estimate excludes your regular federal income tax, which is calculated separately on Form 1040. Quarterly estimated payments to both the IRS and the Virginia Department of Taxation are usually required for the self-employed. Always confirm current wage bases and rates at irs.gov and tax.virginia.gov.