Self-Employed Income Calculator: From Gross Revenue to What You Keep
Ask a self-employed person what they make and you will usually get a revenue number. Ask a lender, a landlord, or the IRS and they all want a different one. A self-employed income calculator walks the chain in order — gross receipts, net profit, adjusted gross income, taxable income, tax, take-home — so you know which figure to quote and how much of the top-line number is genuinely yours.
Six different numbers, all called income
Gross receipts are everything you were paid. Net profit is receipts minus business expenses — the Schedule C line 31 figure. Adjusted gross income subtracts half your self-employment tax, health premiums, and retirement contributions. Taxable income removes the standard deduction. Tax is what the brackets produce. Take-home is what survives after tax and cash costs. Confusing any two of these leads to either a shocking April bill or a mortgage application that goes nowhere.
Net profit is the number that matters most
Every downstream calculation starts at net profit, which is why deduction discipline changes your tax more than working extra hours changes your income. Business expenses reduce self-employment tax, federal income tax, and state tax simultaneously, so a $10,000 expense total on a $60,000 revenue year commonly saves $4,000 in tax.
How self-employment tax fits into the chain
Self-employment tax applies to 92.35% of net profit at 15.3% — 12.4% Social Security up to the wage base, 2.9% Medicare with no cap, plus an extra 0.9% Medicare surtax above $200,000 single or $250,000 joint. It is calculated before income tax and independently of the standard deduction, which is exactly why a low-income freelancer can owe thousands while a W-2 earner at the same income owes nothing.
Adjustments that lower AGI without being business expenses
Three deductions sit on Schedule 1 rather than Schedule C, so they cut income tax but not self-employment tax.
Half of self-employment tax
Automatic. Roughly 7.65% of net profit comes back as an above-the-line deduction.
Self-employed health insurance
Premiums for you, your spouse, and dependents are deductible up to net profit, provided no employer subsidized plan was available.
Retirement contributions
A SEP-IRA allows about 20% of net profit; a Solo 401(k) allows employee deferrals plus an employer share and usually shelters more at moderate income levels.
Worked example: $60,000 of 1099 revenue
Gross receipts $60,000. Eight thousand business miles at $0.70 gives $5,600, plus $2,500 of other expenses — net profit $51,900. Self-employment tax is about $7,330, half of which ($3,665) reduces AGI to $48,235. The single standard deduction leaves roughly $32,600 taxable, producing about $3,700 of federal income tax and, in a 5% state, another $1,630. Total tax near $12,660 — 21% of gross revenue, and about $1,055 per month that should never have felt like spendable income.
What lenders count as self-employed income
Mortgage underwriters use net profit from Schedule C, averaged over two years, then add back non-cash deductions like depreciation. Aggressive write-offs that minimize tax also minimize the income a lender sees — a genuine tension worth planning around a year or two before you apply. Bring two years of full returns, year-to-date profit and loss, and business bank statements.
Irregular income and how to plan around it
Self-employed income arrives unevenly, which makes monthly budgeting the hard part rather than the tax. The workable pattern: route every payment into a business account, move a fixed percentage to a tax savings account the day it lands, then pay yourself a steady monthly draw sized to your lowest recent quarter. The buffer absorbs slow months without touching tax money.
When your income crosses key thresholds
Net profit of $400 triggers self-employment tax. Expected tax of $1,000 triggers quarterly estimated payments. Prior-year AGI above $150,000 raises the safe harbor from 100% to 110%. Profit consistently above roughly $60,000 to $80,000 is where an S-corp election starts to pay for itself. Each threshold is worth knowing in advance, because each one changes what you should be doing in the current year, not the next.
The take-home number nobody calculates
Real take-home is net profit minus total tax minus the cash you spent running the business — noting that mileage is a paper deduction that never left your account, so it belongs in tax math but not in cash math. Most gig workers discover their effective hourly rate is 25% to 35% below the platform's headline figure once both are counted properly.
Run your own chain
Enter your revenue, mileage, and expenses in the self-employed income calculator to see every step from gross to take-home, then use the self-employed paycheck calculator to convert the annual number into a per-payout set-aside you can actually act on.
Frequently asked questions
+How do I calculate self-employed income?
Start with gross receipts, subtract business expenses for net profit, then subtract half your SE tax, health premiums, and retirement contributions for AGI.
+What income do lenders use for self-employed borrowers?
Two-year average net profit from Schedule C, with certain non-cash deductions added back.
+Is gross or net income used for taxes?
Net profit. Both self-employment tax and income tax are calculated after business expenses.
+How much of my self-employed income should I save for taxes?
Typically 25% to 30% of net profit, higher in states with income tax or at higher brackets.
+Do I pay tax on income under $600?
Yes. The $600 figure only decides whether a payer files a 1099.
+Does a retirement contribution reduce self-employment tax?
No. SEP-IRA and Solo 401(k) contributions reduce income tax only; SE tax is computed before them.
About the author
Javed Niamat · Founder & Editor, GigTax
Javed Niamat founded GigTax to make self-employment tax math understandable for rideshare drivers, delivery couriers, creators and freelancers. He builds and maintains every calculator on this site and writes the guides that explain the numbers behind them.
Related calculators
- Self-Employed Tax EstimatorEstimate federal, SE, and state tax for your full 1099 year.
- Side Hustle Tax CalculatorEstimate tax on side-gig 1099 income stacked on your W-2.
- Gig Worker Tax CalculatorFederal + SE + state tax and mileage for any mix of gig platforms.
- Freelancer Tax CalculatorFull 2026 tax estimate on freelance 1099 income and expenses.
Related guides
- Self-Employed Tax Estimator: The 2026 Federal, SE & State GuideHow to accurately estimate 2026 self-employed taxes — federal income tax, 15.3% SE tax, and state tax — with real formulas and a free calculator.
- How to Calculate 1099 Taxes: A Step-by-Step Guide for 2026Learn exactly how to calculate 1099 taxes in 2026 — self-employment tax, federal income tax, deductions, and quarterly payments, with worked examples.
- Schedule C Calculator: Getting to Line 31 Net Profit Without GuessingUse a 2026 Schedule C calculator to move from gross receipts through COGS, mileage and Part II expenses to line 31 net profit and self-employment tax.
- How Much Should I Save for Taxes as a Self-Employed Worker in 2026The exact % of every 1099 payout to save for taxes in 2026. Covers federal, self-employment, and state tax for freelancers, gig workers, and contractors.