SE Tax: The Foundation
Self-employment tax (SE tax) combines Social Security (12.4%) and Medicare (2.9%) taxes that employees split with their employer. As a freelancer, you pay both halves — 15.3% — on your net SE income (after business deductions, applied to 92.35% of net income). Key additional facts: (1) You deduct 50% of SE tax from your gross income, reducing income tax. (2) SE tax is separate from income tax; you pay both. (3) The Social Security component caps at income up to $176,100 (2025).
2025 self-employment tax rates and components
| SE Tax Component | 2025 Rate | 2025 Cap | Paid By |
|---|---|---|---|
| Social Security (SS) | 12.4% | Up to $176,100 in SE income | Self-employed worker |
| Medicare | 2.9% | No cap | Self-employed worker |
| Additional Medicare | 0.9% | On income above $200K (single) | Self-employed worker |
| Total below SS cap | 15.3% | On 92.35% of net SE income | Self-employed worker |
| Total above SS cap | 2.9% + 0.9% if applicable | All income above $176,100 | Self-employed worker |
Quarterly Estimated Tax Payment Guide
SE taxes are paid quarterly, not annually. The quarterly schedule: April 15 (Q1: Jan–Mar), June 16 (Q2: Apr–May), September 15 (Q3: Jun–Aug), January 15 of following year (Q4: Sep–Dec). Each payment covers approximately 25% of your expected annual tax liability. Pay using IRS Direct Pay (free) or EFTPS (free). Set calendar reminders 2 weeks before each due date.
Top Deductions and Tax Reduction Summary
Key SE tax deductions and strategies — 2025 summary
| Deduction/Strategy | Reduces SE Tax? | Reduces Income Tax? | Action Required |
|---|---|---|---|
| Business expenses (equipment, software) | Yes | Yes | Track all; keep receipts |
| Home office (exclusive use) | Yes | Yes | Measure square footage; document use |
| Self-employed health insurance | Yes (indirectly via net income) | Yes | Document premiums paid |
| Solo 401k employer contribution | Yes (via reduced SE income) | Yes | Establish by Dec 31; contribute |
| Vehicle mileage (67¢/mile 2025) | Yes | Yes | Log every business mile |
| SE tax deduction (50% of SE tax) | No | Yes | Automatic on Schedule 1 |
| QBI deduction (20%) | No | Yes | Most SE businesses qualify |
Calculate Your Complete SE Tax Picture
Enter your net SE income, deductions, and retirement contributions to see your exact SE tax, income tax, quarterly payments, and total liability for 2025.