Self-employed individuals pay both the employer and employee share of Social Security and Medicare taxes — totaling 15.3%.
SE tax applies to 92.35% of your net profit. The 15.3% breaks down as: 12.4% Social Security (up to
You can deduct 50% of your SE tax from your gross income, reducing your income tax bill.
This calculator earns its keep at decision points: before accepting a loan, comparing investment platforms, or negotiating salary. The difference between the headline figure and the true cost or return is only visible with accurate arithmetic.
Many financial calculation errors stem from omitting ancillary costs: fees, taxes, insurance, or maintenance. The headline figure (interest rate, monthly payment) is rarely the complete cost of a financial product.
An employee receives a counter-offer from another employer: a £4,000 salary increase but no pension contribution versus the current role's lower salary with 8% employer pension. Running both through the finance calculator shows the true net financial value of each offer.
15.3%: 12.4% Social Security + 2.9% Medicare, applied to 92.35% of net profit.
SE tax applies to net self-employment income above $400/year.
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