United States · Self-employed · Small income
Self-employment tax $400 threshold checker.
Combine profit and loss from up to three side businesses and check the IRS $400 test on 92.35% of the net. Nothing you enter leaves your browser.
The test is on 92.35% of net profit, so the cutoff is a profit of about $433.14, not $400. A profit of $420 gives $387.87 of net earnings and no self-employment tax; a net of $700 does.
How this is calculated
- Net your businesses. Profits and losses from all your sole proprietorships are combined, as Schedule SE does with the Schedule C totals.
- Multiply by 92.35%. The IRS test is applied to net earnings after this adjustment (Schedule SE, line 4c), which is why a profit of exactly $400 does not trigger it.
- Compare with $400. At $400 or more you must pay self-employment tax and file Schedule SE; below it you do not.
- If you pass, the tool shows the Social Security (12.4%) and Medicare (2.9%) tax on the 92.35% amount, with Social Security capped at the $184,500 2026 base.
Worked examples
| Scenario | Result |
|---|---|
| Net profit $420 | $387.87 of net earnings; under $400, SE tax $0 |
| Net profit $433.14 | $400.00 of net earnings; SE tax $61.20 |
| Business 1 profit $1,200, business 2 loss $500 | Net $700.00; $646.45 of net earnings; SE tax $98.91 |
The $433.14 case is the smallest profit, to the cent, that clears $400 after the 92.35% adjustment.
What this does not cover
- Your income tax. Small business profit is taxable income even when no self-employment tax applies.
- Church employee income, where a separate $108.28 test exists.
- The optional methods for figuring net earnings, partnership income (Schedule K-1) and the rules for clergy, notaries and some other workers.
- Hobby versus business classification. See the hobby versus business checklist.
- W-2 wages that already used part of the Social Security wage base; use the self-employment tax calculator for that.
Method and assumptions
The $400 test and 92.35% factor follow the IRS Schedule SE instructions and Topic 554. Amounts are not rounded to whole dollars as a return would, so a result within a dollar of the cutoff should be checked against the actual Schedule SE. The minimum-profit figure is the smallest cent amount for which 92.35% of profit reaches $400.
Results vary with your actual income, deductions, credits and filing situation. This page uses the figures you enter and published IRS rules; it does not predict what you will earn or owe. This is general information, not tax, legal or accounting advice; confirm your own situation against the linked IRS instructions or with a qualified preparer. Nothing here collects or stores personal data.
Sources
- IRS: Self-employment tax (Social Security and Medicare taxes), retrieved October 2026
- IRS Topic no. 554, Self-employment tax, retrieved October 2026
- IRS Instructions for Schedule SE (Form 1040), retrieved October 2026
- IRS Topic no. 751, Social Security and Medicare withholding rates ($184,500 wage base for 2026), retrieved October 2026
Cite this page: TNAADO Tools, "Self-employment tax $400 threshold checker," tools.tnaado.ca/us/self-employment-tax-400-threshold-checker/, figures retrieved October 2026.
Frequently asked questions
Do I owe self-employment tax if I earned less than $400?
Generally no. You must pay self-employment tax and file Schedule SE if your net earnings from self-employment are $400 or more. Net earnings are 92.35% of your profit, so the profit needed is about $433.14. You may still owe income tax on the profit.
Is the $400 based on revenue or profit?
Profit. The IRS test uses net earnings after ordinary and necessary business expenses, then applies the 92.35% adjustment. A 1099-NEC showing $800 of income may be under the line if you had $500 of deductible expenses.
Do losses from one business offset profit from another?
Yes for sole proprietorships: Schedule SE uses the combined net from your Schedule C businesses, so a loss in one reduces net earnings from another. This tool nets what you enter.
If I owe no self-employment tax, do I still report the income?
Yes. Self-employment income is taxable income whether or not it reaches the $400 test, and it is reported on Schedule C. This page only covers self-employment tax.
Is this tax advice?
No. It is general information from IRS instructions. Results vary with your facts, and edge cases such as church income or optional methods are not modelled.
Not tax advice
This is an educational estimate built from the numbers you enter and published IRS rules. It is not tax advice and does not predict what you will earn or owe. Self-employed in Canada instead? Use the Canadian self-employment tax calculator.