Self-employment tax is 15.3% (12.4% Social Security + 2.9% Medicare) on net profit.
When to use this calculator
Use this calculator when preparing for a business decision that depends on this metric. Calculating the figure in advance — rather than estimating — prevents the kind of imprecision that leads to suboptimal choices.
Common mistakes
Many business metric errors arise from using the wrong time period for the calculation. Annualising a figure from a seasonal month, or averaging a figure that changes over time, can produce misleading results that don't reflect steady-state performance.
Real-world scenarios
A startup founder uses the calculator to determine break-even point: fixed monthly costs £12,000, variable cost per unit £18, selling price £42. Break-even is 500 units per month — a concrete sales target that the team can evaluate against pipeline and capacity.
Frequently asked questions
Do I have to pay taxes on eBay sales?
Yes, if your total sales exceed $600 in 2026. eBay reports this to the IRS via 1099-K. You owe tax on net profit (sales minus expenses).