Nebraska self-employment tax calculator

Why the rate is 15.3%

An employee pays 7.65% of FICA out of their wages and the employer pays a matching 7.65% that the employee never sees. Someone self-employed is both parties, so they pay the whole 15.3%. That is the entire explanation, and it is why the first profitable year of a business feels so much worse than a job paying the same money.

The 15.3% splits into 12.4% for Social Security and 2.9% for Medicare. The Social Security half stops once your combined wages and self-employment earnings reach $184,500 in 2026. The Medicare half never stops, and an additional 0.9% surcharge applies above $200,000 for a single filer.

Why only 92.35% of profit?

Because an employer would have deducted its half of FICA as a business expense before any tax was worked out, and the law gives self-employed people a rough equivalent.

The tax is charged on 92.35% of net profit rather than all of it. The 7.65% removed represents that notional employer half. It is a blunt correction applied to everybody at the same rate regardless of income, and it is built into the tool: the result line labelled "income subject to the tax" is always your profit multiplied by 0.9235.

The word net matters as much as the percentage. This is profit after business expenses, not revenue. If you are entering a gross receipts figure here, the answer will be far too high.

What counts as net profit

The figure this tool wants is the bottom line of your Schedule C, or your share of the profit from a partnership: gross receipts minus every ordinary and necessary business expense.

That distinction is worth real money, because expenses reduce the base twice over. A dollar of legitimate deduction removes a dollar of profit from the 15.3% payroll charge and from the income tax on the same dollar. At a 22% marginal rate that is roughly 36 cents saved on every deductible dollar, which is why disorganised record keeping is one of the most expensive habits a sole trader can have.

Not every kind of income counts. Self-employment tax applies to earnings from a trade or business you actively carry on. Rental income, interest, dividends and capital gains are not self-employment earnings, and neither is most passive partnership income for a limited partner. A W-2 job's wages are not either, though they matter here for a different reason, covered below.

There is a floor. If your net earnings from self-employment for the year come to less than $400, no self-employment tax is due at all, and the IRS sets out that threshold on its self-employment tax page. Below that line you may still owe income tax on the money, which is another reminder that the two charges are separate.

The tool takes your profit figure at face value. It cannot tell whether you have counted your expenses properly, and getting that number right before you type it in matters more than anything the calculator does with it afterwards.

A worked example on $60,000 of profit

The calculator opens on $60,000 of net self-employment profit with no W-2 wages.

That is 14.1% of the headline profit, which is what 15.3% on 92.35% works out to for anyone below the wage base. And it is only the payroll half of the bill. Federal income tax on the same $60,000, less the deductible half and the standard deduction, comes on top, as does state income tax in most of the country.

Do I pay income tax as well as this?

Yes, and this is the single most common reason for an unexpected April bill.

Self-employment tax and income tax are two separate charges on the same profit. The tool computes the first only. A useful planning figure while you are working out your own numbers: set aside roughly 30% of profit, split between self-employment tax and income tax, then adjust once you know which bracket your total income lands in. Our tax section covers the income tax side, and the FICA explainer covers why the payroll charge exists at all.

The deductible half softens it. Half of the self-employment tax you pay, $4,238.87 in the example above, comes off your income before income tax is worked out. It is an adjustment to income rather than an itemised deduction, so you get it whether or not you itemise. The tool shows the figure but does not apply it, because applying it would require knowing your income tax position.

The wage base is shared with your job

If you have employment as well as a business, your W-2 wages use up the Social Security wage base first. The tool has a field for exactly this, and it changes the answer substantially.

Earn $150,000 in wages and $60,000 in profit, and only $34,500 of the profit is subject to the 12.4% Social Security portion, because $150,000 of the $184,500 base has already gone. Medicare's 2.9% still applies to the full 92.35% of profit, and the 0.9% surcharge applies to the combined figure above the threshold.

People with a job and a side business routinely overpay here, either by ignoring the interaction entirely or by letting software double-count the base. It is worth checking the figure on your return against this.

Quarterly payments and the safe harbour

Nobody is withholding for you, so the IRS expects estimated payments four times a year: April, June, September and the following January. The obligation starts once you expect to owe $1,000 or more for the year after withholding and credits. Missing them triggers an underpayment penalty even if you settle in full at filing.

The safe harbour is the thing to aim at rather than accuracy. Pay either 90% of this year's liability or 100% of last year's, rising to 110% if your prior-year income was above $150,000, and no penalty applies however the year turns out.

• Open a separate account and move a fixed share of every payment into it
• Work out the safe harbour figure from last year's return, not from a guess
• Diary the four payment dates, including the January one that falls in the next year
• Track deductible expenses through the year, since they reduce net profit and so the tax
• Check whether your state also requires estimated payments, as most do
• Revisit the estimate mid-year if profit is running well above or below plan

The mistakes that produce an April surprise

Budgeting from revenue instead of net profit. The tax is on profit. Entering revenue here overstates the bill; forgetting expenses when you file understates it.

Treating self-employment tax as the whole tax. It is roughly half of what a profitable sole trader owes. Income tax is the other half and it arrives at the same time.

Assuming an S corporation election is a free saving. It can genuinely reduce the earnings subject to payroll tax, by splitting your take into a salary and a distribution, but the salary must be reasonable for the work, and the structure adds payroll filings, an extra return and real accounting cost. It rarely pays below a certain level of profit, and our business section goes through when it starts to.

Skipping quarterly payments because the year is going well. The penalty is charged on the shortfall for the period it existed, so paying everything in April does not cure it.

Forgetting the deductible half. It is an adjustment to income that people leave on the table, particularly when filing by hand.

Where this calculator stops

Its own caveats, stated plainly:

• Social Security stops, Medicare does not. The 12.4% applies only up to $184,500 of combined wages and self-employment income for 2026. The 2.9% applies to everything.
• This is the payroll half only. Federal and state income tax on the same profit is separate and is not computed here.
• The 0.9% surcharge uses the single-filer threshold. It starts at $200,000 single and $250,000 filing jointly, and the tool applies the single figure, so a joint filer near the line will see a number that is too high.
• The qualified business income deduction is not modelled. Neither are retirement contributions, the self-employed health insurance deduction, or the home office deduction, all of which change what you actually owe.
• State tax is not included at all. Most states tax business profit as personal income.

If you want the payroll picture for employment rather than self-employment, the paycheck tools work in the other direction. Nothing here is tax advice: see the disclaimer.