How to calculate self-employment tax
- Enter your net profit from self-employment: business income minus deductible business expenses.
- Choose the tax year and your filing status. If you also earned W-2 wages, enter them: wages count toward the Social Security wage base and the Additional Medicare Tax threshold.
- Read the self-employment tax, the half you can deduct on your Form 1040, and a quarterly amount to set aside for estimated payments.
How the self-employment tax works
Employees split Social Security and Medicare taxes with their employer, 7.65% each. Self-employed people pay both halves, a combined 15.3%: 12.4% for Social Security and 2.9% for Medicare. It is charged on 92.35% of your net profit, which mirrors the employer's share being deductible for a business. For example, $50,000 of net profit gives net earnings of $46,175 and self-employment tax of $7,064.78 (12.4% = $5,725.70 plus 2.9% = $1,339.08).
The 12.4% Social Security part stops at the wage base: $184,500 for 2026 and $176,100 for 2025, reduced by any W-2 wages that already paid Social Security tax. Medicare has no cap, and an extra 0.9% Additional Medicare Tax applies to earnings above $200,000 (single or head of household), $250,000 (married filing jointly) or $125,000 (married filing separately). No SE tax is due if net earnings are under $400.
Half of your SE tax (not including the Additional Medicare Tax) is deductible as an adjustment to income, which lowers your income tax but not the SE tax itself. Self-employment tax is in addition to federal and state income tax, so many freelancers set aside 25–30% of profit in total and pay estimated taxes quarterly with Form 1040-ES to avoid underpayment penalties. Rates and wage bases checked against IRS Schedule SE instructions and the SSA's announced wage bases on 20 October 2026. This is an estimate, not tax advice.
What is the self-employment tax rate for 2026?
15.3% on 92.35% of net earnings: 12.4% Social Security up to the $184,500 wage base and 2.9% Medicare on all earnings, plus 0.9% above the Additional Medicare threshold.
How much self-employment tax do I pay on $100,000?
Net earnings are $92,350, so SE tax is $14,129.55 (12.4% = $11,451.40 plus 2.9% = $2,678.15). Half, $7,064.78, is deductible.
Do I pay self-employment tax if I also have a job?
Yes, on your self-employment earnings. Your W-2 wages reduce how much of it is subject to the 12.4% Social Security part once you near the wage base.
When are quarterly estimated taxes due?
Usually 15 April, 15 June and 15 September of the tax year and 15 January of the next year, moved to the next business day if they fall on a weekend or holiday.