Free tool · Money & pricing
Self-employment tax calculator
Self-employment tax is the Social Security and Medicare tax you pay on your own net earnings — 15.3% on 92.35% of net profit, with the Social Security part capped at the annual wage base. Enter your profit to estimate it for 2026 or 2027.
Self-employment tax, 2026
$8,478
14.1% of your net profit.
- Net earnings subject to SE tax (92.35%)
- $55,410
- Social Security (12.4%)
- $6,871
- Medicare (2.9%)
- $1,607
- Self-employment tax
- $8,478
- Deductible half (reduces income tax)
- $4,239
- Additional Medicare tax (0.9%, Form 8959)
- $0
- Quarterly set-aside for SE tax alone
- $2,119
Social Security wage base: $184,500 (SSA). This is SE tax only — federal and state income tax are on top. An estimate, not tax advice.
How it is calculated (Schedule SE)
- Net earnings = Net profit × 92.35%
- Social Security = 12.4% × Net earnings (up to the wage base, minus any W-2 wages)
- Medicare = 2.9% × Net earnings
- Deduction = half of the SE tax
Who pays self-employment tax
If you are a sole proprietor, an independent contractor paid on a 1099, a single-member LLC taxed as a sole proprietorship, or a partner in a partnership, you generally owe self-employment tax once your net earnings from self-employment reach $400 for the year.
It replaces the Social Security and Medicare taxes an employer would otherwise split with you. That is why it feels high: you pay both the employee and the employer share.
Worked example
A freelance designer has $90,000 of revenue and $15,000 of business expenses, so net profit is $75,000.
Net earnings subject to the tax are $75,000 × 92.35% = $69,263. Social Security is 12.4% of that ($8,589) and Medicare is 2.9% ($2,009), for $10,597 of self-employment tax. Half of it — about $5,299 — is deducted when working out income tax, which lowers the income tax bill but not the SE tax itself.
Paying it: quarterly estimated taxes
Nobody withholds tax from 1099 income, so the IRS expects estimated payments during the year (Form 1040-ES), usually in April, June, September and January. Missing them can trigger an underpayment penalty.
A simple habit: move a fixed percentage of every client payment into a separate tax savings account the day it arrives, then pay from that account each quarter. Remember that income tax — federal and, in most states, state — comes on top of the SE tax this calculator shows.
Ways people reduce it (legally)
- Track every deductible business expense. SE tax is charged on profit, so legitimate expenses reduce it directly.
- S-corporation election. Some profitable LLC owners elect S-corp status and pay themselves a reasonable salary, so only that salary carries payroll tax. It adds payroll, bookkeeping and filing costs, so get advice from a CPA before switching.
- Retirement contributions (SEP-IRA, solo 401(k)) reduce income tax, though not SE tax.
This page is general information, not tax advice; check IRS Schedule SE instructions or a tax professional for your situation.
Frequently asked questions
What is the self-employment tax rate for 2026?
15.3%: 12.4% for Social Security on net earnings up to the 2026 wage base of $184,500, plus 2.9% for Medicare with no cap. It applies to 92.35% of your net self-employment profit.
How much should I set aside for taxes as a 1099 worker?
Self-employment tax alone is roughly 14% of net profit. Add your expected federal and state income tax rate on top; many freelancers set aside 25–35% of profit and adjust once they see their first return.
Do I pay self-employment tax if I also have a W-2 job?
Yes, on your self-employment profit. Your W-2 wages do count toward the Social Security wage base, so if wages plus self-employment earnings exceed it, you pay less Social Security tax on the self-employed part.
Is self-employment tax deductible?
Half of it is deductible as an adjustment to income on your Form 1040. That reduces income tax, not the self-employment tax itself.
What is the Social Security wage base for 2027?
The Social Security Administration lists $192,300 as the 2027 contribution and benefit base, up from $184,500 in 2026.