Self Employment Tax Calculator
Tax year: 2026 · Last updated 2026-06-21 · Source: IRS
Reviewed by Dr. Julian Vance, co-founder, lead data architect & primary author · 2026-06-21
Your Schedule C net profit (income minus business expenses).
If you also had a job, enter wages already subject to Social Security.
Estimated self-employment tax
$11,304
Effective rate 14.1% of net profit · 2026 tax year
How self-employment tax is calculated
If you're a freelancer, 1099 contractor, or sole proprietor, you pay self-employment (SE) tax to fund Social Security and Medicare. A traditional employee and their employer each pay 7.65% of wages. When you work for yourself, you are both — so you pay the full 15.3%. This is in addition to federal income tax.
The formula
The calculation follows IRS Schedule SE:
- Step 1 — Net earnings. Multiply your net profit (Schedule C, line 31) by 92.35%. This adjustment reflects the employer-equivalent portion you don't pay yourself.
- Step 2 — $400 threshold. If net earnings are under $400, you owe no SE tax.
- Step 3 — Social Security (12.4%). Applies to net earnings up to the wage base ($184,500 in 2026; $176,100 in 2025). Any W-2 wages already taxed for Social Security use up part of that base.
- Step 4 — Medicare (2.9%). Applies to all net earnings, with no cap.
- Step 5 — Additional Medicare (0.9%). Applies to net earnings above $200,000 (single) or $250,000 (married filing jointly).
- Step 6 — Deductible half. You may deduct one half of the Social Security + Medicare tax as an above-the-line income adjustment.
A worked example
Suppose a freelancer has $80,000 of net profit and files as single, for the 2025 tax year:
- Net earnings: $80,000 × 0.9235 = $73,880
- Social Security: $73,880 × 12.4% = $9,161.12
- Medicare: $73,880 × 2.9% = $2,142.52
- Additional Medicare: $0 (under $200,000)
- Total SE tax: $11,303.64
- Deductible half: $11,303.64 ÷ 2 = $5,651.82
So this freelancer owes roughly $11,304 in SE tax and can deduct $5,652 against income tax. Because SE tax is often the single largest line for new freelancers, set aside for it every time you invoice — and pay it through quarterly estimated taxes to avoid IRS underpayment penalties.
Every rate and threshold here is pulled from the current IRS and SSA publications and re-checked each January. This tool is an estimate for educational use, not tax advice — confirm your figures with the IRS sources below or a qualified tax professional.
Sources
Frequently asked questions
What is self-employment tax?+
Self-employment (SE) tax is how self-employed people pay Social Security and Medicare taxes. Employees split these with an employer (7.65% each); when you work for yourself you pay both halves — 15.3% total — on 92.35% of your net profit. It is separate from, and on top of, federal income tax.
How is the 15.3% self-employment tax rate calculated?+
The 15.3% is 12.4% for Social Security plus 2.9% for Medicare. You first multiply your net profit by 92.35% to get your net earnings from self-employment, then apply the rates. The 12.4% Social Security portion only applies up to the annual wage base ($184,500 for 2026; $176,100 for 2025); the 2.9% Medicare portion has no cap.
Do I pay self-employment tax if I earn less than $400?+
No. If your net earnings from self-employment (net profit × 92.35%) are under $400, you owe no SE tax. Above $400, SE tax applies to the full amount.
Can I deduct half of my self-employment tax?+
Yes. You can deduct one half of your Social Security and Medicare SE tax as an above-the-line adjustment to income on your Form 1040. This lowers your income tax (not your SE tax). The 0.9% Additional Medicare Tax is not part of the deductible half.
What is the Additional Medicare Tax?+
High earners pay an extra 0.9% Medicare tax on net earnings above $200,000 (single) or $250,000 (married filing jointly). These thresholds are not adjusted for inflation. This calculator adds it automatically when your earnings cross the threshold for your filing status.
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