Free Tax Tool
Self-Employment Tax Calculator
Estimate your 2025 federal self-employment tax (Social Security + Medicare) and New Jersey Gross Income Tax based on your net self-employment income.
Enter Your Information
Your Schedule C profit, partnership ordinary income, or S-Corp net income from K-1 before SE tax deduction.
How Self-Employment Tax Works
Self-employment tax (SE tax) is how self-employed individuals pay the Social Security and Medicare taxes that employees split with their employers. When you are an employee, your employer pays 7.65% and you pay 7.65% — a total of 15.3%. When you are self-employed, you pay both halves yourself.
The SE Tax Calculation
SE tax is calculated on 92.35% of your net self-employment income (the 7.65% reduction accounts for the employer-equivalent half of SE tax). For 2025:
- • Social Security: 12.4% on net SE income up to $176,100 (the 2025 wage base)
- • Medicare: 2.9% on all net SE income, with no cap
- • Additional Medicare Tax: 0.9% on net SE income above $200,000 (single) or $250,000 (married filing jointly)
The SE Deduction
To account for the employer-equivalent portion of SE tax, you can deduct 50% of your total SE tax from your gross income as an above-the-line deduction (reducing your AGI). This deduction appears on Schedule 1, Line 15.
The S-Corp Strategy
Many self-employed individuals in NJ reduce their SE tax burden by electing S-Corp treatment. With an S-Corp, you pay yourself a reasonable W-2 salary (subject to FICA), and additional profits are distributed as S-Corp distributions — which are not subject to SE tax. For high-income earners, this can save thousands per year.
The information provided is for general educational purposes only and does not constitute tax, legal, or investment advice. This content is not intended or written to be used, and cannot be used, for the purpose of avoiding penalties under the Internal Revenue Code. Tax outcomes depend on your specific facts and circumstances. Viewing this material does not create a CPA-client relationship. Personalized advice is provided only through a signed engagement letter.