We derive simple analytical expressions for the error and computational efficiency of simulated tempering (ST) simulations. The theory applies to the important case of systems whose dynamics at long times is dominated by the slow interconversion between two metastable states. An extension to the multistate case is described. We show that the relative gain in efficiency of ST simulations over regular molecular dynamics (MD) or Monte Carlo (MC) simulations is given by the ratio of their reactive fluxes, i.e., the number of transitions between the two states summed over all ST temperatures divided by the number of transitions at the single temperature of the MD or MC simulation. This relation for the efficiency is derived for the limit in which changes in the ST temperature are fast compared to the two-state transitions. In this limit, ST is most efficient. Our expression for the maximum efficiency gain of ST simulations is essentially identical to the corresponding expression derived by us for replica exchange MD and MC simulations [E. Rosta and G. Hummer, J. Chem. Phys. 131, 165102 (2009)] on a different route. We find quantitative agreement between predicted and observed efficiency gains in a test against ST and replica exchange MC simulations of a two-dimensional Ising model. Based on the efficiency formula, we provide recommendations for the optimal choice of ST simulation parameters, in particular, the range and number of temperatures, and the frequency of attempted temperature changes.