How to Calculate SS Taxes After Pretax Deductions
Social Security taxes are applied to your total gross income, not to your income after you apply other deductions. Self-employed earners can use half of the self-employed tax to further adjust their incomes for other income taxes. Apply one-half of the current Social Security tax rate if you have an employer to share the Social Security tax payment. Apply the Social Security portion of the self-employed tax if you are self-employed.
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Instructions
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Employee of A Company
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1
Compile the list and amounts of the pretax deductions that were subtracted from your gross income for the year.
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2
Add the tax deductions to your gross adjusted income to arrive at your total gross income amount.
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3
Multiply your gross income amount up to $106,800 by 4.2 percent to arrive at a sum equal to your Social Security tax burden. Your employer must pay the balance of the 12.4 percent Social Security tax.
Self-Employed Workers
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4
Calculate your income as a self-employed worker. Take your income and subtract the cost of doing business without adding any additional tax credits and deductions unrelated to operating your business.
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5
Multiply your income, up to $106,800, by 10.4 percent to arrive at the amount of your Social Security tax burden.
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6
Apply the remainder of the Self-Employment tax, 2.9 percent for Medicare, to your total gross income.
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1
Tips & Warnings
After figuring your Social Security tax amount, as a self-employed person you can deduct one-half of the Self-Employment Tax from your gross income before calculating additional tax and deductions.
