# Self-Employment Tax Calculator

Calculate your self-employment tax (Social Security and Medicare) for 2025-2026. Perfect for freelancers, independent contractors, and small business owners.

## Income Information

**Tax Year:** 2025 2026

- **Self-Employment Income:** $75,000
- **Business Expenses:** $15,000
- **Filing Status:** Single Married Filing Jointly
- **I also have W-2 income**

## Self-Employment Tax Calculation

**Total Self-Employment Tax**  
$8,478  
for 2025 tax year

### Tax Breakdown

- **Net Self-Employment Income:** $60,000  
- **SE Taxable Income (92.35%):** $55,410  
- **Social Security Tax (12.4%):** $6,871  
- **Medicare Tax (2.9%):** $1,607  
- **Total SE Tax:** $8,478

**Tax Deduction**  
You can deduct 50% of your SE tax ($4,239) from your income taxes.

**Effective SE Tax Rate:** 14.13%

**Important Note**  
Self-employment tax is separate from income tax. You'll need to pay both self-employment tax and income tax on your net earnings.

## What is Self-Employment Tax?

### Social Security

12.4% up to $176,100 wage base (2025)

### Medicare

2.9% on all net earnings

### Additional Medicare

0.9% on income over $200,000

## Who Needs to Pay Self-Employment Tax?

### Freelancers & Contractors

If you earn $400+ from freelance work or contract work (1099 income)

### Small Business Owners

Sole proprietors, single-member LLC owners, and partners in partnerships

### Gig Economy Workers

Uber/Lyft drivers, delivery drivers, and other gig workers

## How to Calculate Self-Employment Tax in 2026

**Self-employment tax** funds **Social Security** and **Medicare** for anyone who works for themselves. The combined **SE tax rate is 15.3%**, split into two parts: **12.4% for Social Security** and **2.9% for Medicare**. Unlike W-2 employees who split these taxes with their employer, self-employed individuals pay both halves.

The IRS does not apply the 15.3% rate directly to your gross income. Instead, you first calculate **net earnings** (gross self-employment income minus business expenses), then multiply by **92.35%** (the taxable portion). This 7.65% reduction mirrors the employer-equivalent share that W-2 workers never see on their paystubs.

| Step | Calculation | Example ($100,000 net) |
| --- | --- | --- |
| 1. Net self-employment income | Gross income − business expenses | $100,000 |
| 2. Taxable SE earnings | Net income × 92.35% | $92,350 |
| 3. Social Security tax | Taxable earnings × 12.4% (up to $176,100) | $11,451 |
| 4. Medicare tax | Taxable earnings × 2.9% | $2,678 |
| 5. Total SE tax | Social Security + Medicare | $14,130 |
| 6. Deductible portion | Total SE tax × 50% | $7,065 |

The **Social Security wage base for 2026 is $176,100**. Net SE earnings above that threshold are exempt from the 12.4% Social Security portion but still owe the 2.9% Medicare tax. High earners also face an **Additional Medicare Tax of 0.9%** on combined earnings above **$200,000** (single) or **$250,000** (married filing jointly).

## SE Tax Deduction and Filing Requirements

The IRS allows you to **deduct 50% of your self-employment tax** as an adjustment to income on **Form 1040, line 15**. This is an above-the-line deduction, meaning you claim it whether you itemize or take the **standard deduction ($15,700 for single filers in 2026)**. On $14,130 of SE tax, the deduction saves $7,065 from your adjusted gross income.

You must file **Schedule SE (Form 1040)** if your net self-employment earnings reach **$400 or more** in a tax year. This threshold applies per person, not per business. Schedule SE calculates your total SE tax liability, which then transfers to your **Form 1040**.

Self-employed taxpayers must also make **quarterly estimated tax payments** using **Form 1040-ES**. The IRS expects payments by April 15, June 15, September 15, and January 15 of the following year. Missing these deadlines triggers an **underpayment penalty** calculated at the federal short-term rate plus 3 percentage points.

## Self-Employment Tax vs. Income Tax

**Self-employment tax** and **federal income tax** are two separate obligations. SE tax is a flat-rate payroll tax (15.3%) that funds Social Security and Medicare. Federal income tax uses progressive brackets ranging from **10% to 37%** based on your taxable income and filing status.

A freelancer with $80,000 in net earnings pays roughly $11,304 in SE tax _plus_ federal income tax on the remaining taxable amount after deductions. The 50% SE tax deduction, the **standard deduction**, and any itemized deductions reduce the income tax portion but do not reduce SE tax itself.

The **Qualified Business Income (QBI) deduction under Section 199A** lets eligible self-employed filers deduct up to **20% of qualified business income** from their federal income tax. This deduction was made permanent by the One Big Beautiful Bill Act of 2025. It applies to income tax only and does not reduce SE tax.

## Who Must Pay Self-Employment Tax

You owe SE tax if you earn **$400 or more** in net self-employment income during the tax year. This includes **sole proprietors**, **single-member LLC owners**, **independent contractors receiving 1099-NEC forms**, **freelancers**, **gig economy workers**, and **general partners** in a partnership. S-Corp shareholders who receive reasonable salary already pay FICA through payroll and owe SE tax only on additional pass-through income in specific circumstances.

If you also have W-2 wages, your employer already withholds **6.2% for Social Security** and **1.45% for Medicare**. The Social Security tax cap of $176,100 in 2026 applies to your _combined_ W-2 and SE earnings. For example, if your W-2 wages are $120,000, only the first $56,100 of your SE taxable income is subject to the 12.4% Social Security rate.

**Important Links:**  
- [IRS Self-Employment Tax](https://www.irs.gov/businesses/small-businesses-self-employed/self-employment-tax-social-security-and-medicare-taxes)  
- [IRS Schedule SE Form](https://www.irs.gov/pub/irs-pdf/f1040sse.pdf)  
- [Social Security Wage Base](https://www.ssa.gov/oact/cola/cbb.html)

This calculator provides estimates. Your actual tax liability may vary. Consult a tax professional for personalized advice. Tax rates and wage base limits accurate as of January 12, 2026.