Self-Employment Tax Calculator

Estimate the Social Security and Medicare tax you owe on self-employment income for 2026, following the IRS Schedule SE method, plus the deduction you get for half of it.

Business income minus business expenses (Schedule C line 31), for the year.

Wages already subject to Social Security and Medicare. They use up part of the Social Security wage base.

Only affects the Additional Medicare Tax threshold.

Self-employment tax
$8,477.73
Deduction for half of SE tax
$4,238.87Reduces your adjusted gross income for income tax.
Social Security portion (12.4%)
$6,870.84
Medicare portion (2.9%)
$1,606.89
Additional Medicare Tax (0.9%) on SE income
$0.00
Effective SE tax rate on profit
14.13%
  • Self-employment tax is separate from income tax: you owe income tax on the same profit at your regular rates. The deduction for half of SE tax lowers your income tax, not your SE tax.
  • Additional Medicare Tax is figured on Form 8959, not Schedule SE, and isn't part of the deductible half.

Step by step (Schedule SE method)

StepAmount
Net profit$60,000.00
Net earnings from self-employment (× 92.35%)$55,410.00
Social Security wage base left after W-2 wages$184,500.00
Earnings subject to Social Security (smaller of the two)$55,410.00
Social Security tax (× 12.4%)$6,870.84
Medicare tax (net earnings × 2.9%)$1,606.89
Self-employment tax$8,477.73
Deduction for half of SE tax (× 50%)$4,238.87
Additional Medicare threshold left after wages ($200,000 for this status)$200,000.00
Additional Medicare Tax (0.9% of net earnings above that)$0.00

What self-employment tax is

Employees split Social Security and Medicare tax with their employer: each pays 7.65% of wages. When you work for yourself you pay both halves, 15.3% in total — 12.4% for Social Security and 2.9% for Medicare. That's self-employment (SE) tax, and it applies to freelancers, independent contractors, gig workers and sole proprietors once net earnings reach $400 for the year.

SE tax is on top of income tax, not instead of it. Your business profit is also included in your income and taxed at your regular income tax rates.

How Schedule SE calculates it

You don't pay SE tax on your whole profit. Schedule SE first multiplies net profit by 92.35% to get net earnings from self-employment. That 7.65% reduction mirrors the employer half of the tax, which an employee never sees in their wages.

Social Security tax (12.4%) applies to net earnings only up to the 2026 wage base of $184,500. If you also have a job, your W-2 wages count toward that cap first, so only the remaining room is taxed. Medicare tax (2.9%) has no cap.

You then get to deduct half of your SE tax when figuring adjusted gross income, which lowers your income tax. It doesn't reduce the SE tax itself.

Additional Medicare Tax and paying during the year

High earners owe an extra 0.9% Additional Medicare Tax on combined wages and self-employment earnings above $200,000 (single, head of household or qualifying surviving spouse), $250,000 (married filing jointly) or $125,000 (married filing separately). Wages use up the threshold first. It's reported on Form 8959, and it isn't part of the deductible half.

Nobody withholds SE tax for you, so you generally need to pay it, along with income tax, through quarterly estimated tax payments using Form 1040-ES, or by increasing withholding at a W-2 job. These results are estimates; your return may differ if you have farm income, church employee income, optional methods or other special situations.

The formula

Net earnings = net profit × 92.35%Social Security tax = 12.4% × smaller of (net earnings, wage base − W-2 wages)Medicare tax = 2.9% × net earningsSE tax = Social Security tax + Medicare tax; deduction = SE tax × 50%Additional Medicare Tax = 0.9% × (net earnings − max(0, threshold − W-2 wages)), if positive
  • Wage base = $184,500 for 2026
  • Threshold = $200,000 single, head of household or surviving spouse; $250,000 married filing jointly; $125,000 married filing separately
  • No SE tax is due if net earnings are under $400

Example

  1. A freelancer with $60,000 of net profit and no other job.
  2. Net earnings: 60,000 × 0.9235 = $55,410.
  3. Social Security: 55,410 × 12.4% = $6,870.84. Medicare: 55,410 × 2.9% = $1,606.89.
  4. Self-employment tax: $8,477.73, about 14.13% of profit.
  5. Deduction for half of SE tax: $4,238.87, which lowers the income on which income tax is figured.

Frequently asked questions

What is the self-employment tax rate?

15.3% of net earnings from self-employment: 12.4% Social Security on up to $184,500 for 2026 and 2.9% Medicare on all of it. Because net earnings are 92.35% of profit, the effective rate on profit is about 14.13% below the wage base.

Do I pay self-employment tax if I also have a W-2 job?

Yes, if your net earnings are $400 or more. Your wages count toward the Social Security wage base first. For example, with $150,000 of wages and $80,000 of profit, only $34,500 of your $73,880 net earnings is subject to Social Security tax, so SE tax is $6,420.52 instead of the full 15.3%.

How much SE tax do I pay on $200,000 of profit?

Net earnings are $184,700. Social Security tax stops at the $184,500 wage base ($22,878) and Medicare is $5,356.30, for $28,234.30 in total. Half, $14,117.15, is deductible.

Is self-employment tax deductible?

Half of it is. You deduct 50% of your SE tax as an adjustment to income on Schedule 1, which lowers your income tax. You can't deduct the Additional Medicare Tax.

When do I have to pay self-employment tax?

It's due with your income tax return, but because there's no withholding you usually need to make quarterly estimated payments during the year to avoid an underpayment penalty. Form 1040-ES explains the due dates and has a worksheet.

Sources

Last reviewed for 2026. How we calculate.