Work out your 2026 Schedule SE tax — the 15.3% Social Security and Medicare tax on your net profit — plus the half you deduct and the real rate after it. Built for 1099 and self-employed filers, and it handles the W-2-job and S-corp cases most calculators skip.
Built & maintained by Marcus, freelancer·Figures from IRS (Schedule SE & Topic 554)·Last updated July 2026
How it works in 2026: self-employment tax is the freelancer's version of the payroll taxes a job withholds — 15.3% total (12.4% Social Security + 2.9% Medicare) on 92.35% of your net profit. The Social Security part stops at $184,500 of earnings for 2026 (up from $176,100 in 2025); Medicare has no cap. You then deduct half of the tax against your income tax.
15.3%
Combined SE tax rate
$184,500
2026 Social Security wage cap
$400
Net earnings you owe it from
50%
Of your SE tax is deductible
$/ yr
$/ yr
Your 2026 self-employment tax
Net earnings from self-employment92.35% of your net profit$55,410
Social Security tax12.4% on first $184,500$6,871
Medicare tax2.9% on all net earnings — no cap$1,607
Additional Medicare tax0.9% over the threshold$0
Total self-employment tax$8,478
Deductible half above-the-line on Schedule 1 — cuts your income tax$4,239
Self-employment tax is separate from federal income tax — you owe both. This tool computes only the Schedule SE tax; for your full bill including income tax, use the Self-Employed Tax Calculator. The Social Security portion stops at $184,500 of earnings for 2026; wages from a W-2 job fill that cap first.
Self-employment tax feels like a flat 15.3%, but you deduct half of it against your income tax — so its real cost is lower. This tab shows the after-deduction number for your bracket.
$/ yr
The real cost of your self-employment tax
Self-employment tax$8,478
Income tax saved by the ½ deduction½ of SE tax × 22% bracket$933
Net cost of self-employment tax$7,545
The half-of-SE-tax deduction is an adjustment to income (Schedule 1), so it saves tax at your marginal income-tax rate. Additional Medicare Tax (0.9%) is not deductible, so this uses the base 15.3% self-employment tax from the SE Tax tab.
A sole proprietor pays self-employment tax on all profit. An S-corp pays payroll tax on your salary only — distributions escape it. Here's a quick estimate of the SE/payroll tax an S-corp could save, before the cost of running one.
$
$
$
Sole proprietor
Self-employment tax
$8,478
15.3% on 92.35% of all profit
Taxed base$55,410
Distributions taxed for SEAll of it
S-corp
Payroll tax
$6,120
15.3% on the salary only
Taxed base (salary)$40,000
Distributions taxed for SENone
"Reasonable" salary is the catch. The IRS requires S-corp owners to pay themselves a reasonable wage for the work they do before taking distributions. Set it too low and you invite an audit; too high and you lose the saving. This estimate is directional only.
An S-corp also changes your income tax and can shrink your 20% QBI deduction, which this SE-tax-only view leaves out. Run the full comparison in the S-Corp Tax Calculator before you decide.
How self-employment tax works in 2026
When you're an employee, your paycheck has Social Security and Medicare taxes taken out — 7.65% from you, and another 7.65% quietly paid by your employer. When you work for yourself, you are both, so you pay both halves: a combined 15.3%. That's self-employment tax, and it's completely separate from the income tax on the same money. This self-employment tax calculator handles just that Schedule SE piece, so you can see it clearly on its own.
It doesn't apply to every dollar of profit. First you multiply your net profit by 92.35% to get your "net earnings from self-employment" — that adjustment stands in for the employer-half deduction an employee never sees. Then the 15.3% splits in two: 12.4% for Social Security, which only applies to the first $184,500 of earnings in 2026, and 2.9% for Medicare, which applies to everything with no ceiling. Because of the 92.35% step, the effective rate on your profit is about 14.1% right up until you hit the Social Security cap.
You only owe it once your net earnings reach $400 for the year. High earners pay an extra 0.9% Additional Medicare Tax on self-employment income above $200,000 (single) or $250,000 (married filing jointly). And if you have a regular job too, the Social Security wages your employer already taxed use up part of the $184,500 cap first — so less of your side income gets the 12.4% treatment. The SE Tax tab above bakes all of that in.
Why your real cost is below 15.3%
The 15.3% headline scares people, but it overstates what self-employment tax actually costs you. That's because you get to deduct half of it — the employer-equivalent portion — as an above-the-line adjustment on Schedule 1. That deduction lowers your adjusted gross income, which lowers your federal income tax. So the tax leaves with one hand and a chunk comes back with the other.
Here's the arithmetic on a $60,000 profit. The self-employment tax is about $8,478. Half of that — $4,239 — is deductible, and for someone in the 22% bracket that deduction saves roughly $933 in income tax. So the net cost of the self-employment tax is closer to $7,545, an effective rate around 12.6% of profit rather than the 15.3% on the label. The True Cost After Deduction tab runs this for your own bracket.
This is also why comparing "1099 versus W-2" on tax alone is misleading: as a W-2 employee you'd pay 7.65% and your employer would cover the other 7.65% invisibly. As a freelancer you pay both, but you deduct one and you can offset profit with business expenses an employee can't. The 1099 vs W-2 calculator weighs the whole picture.
How to reduce your self-employment tax
Self-employment tax is charged on your net profit, so anything that legitimately lowers your profit lowers the tax — at that effective ~14.1%, on top of income-tax savings. The everyday freelancer deductions all count: the home office deduction, business mileage, and ordinary business expenses. Watch the two big ones that don't cut SE tax: the self-employed health insurance deduction and retirement contributions lower your income tax but sit below the Schedule SE line, so the 15.3% still applies to the full profit.
The bigger lever, once your profit is high enough, is electing S-corporation status. As an S-corp you pay yourself a reasonable salary — which still owes the 15.3% payroll tax — and take the rest as distributions, which are not subject to self-employment tax. That saving on the distribution portion is what makes S-corps popular above roughly $60,000–$80,000 of profit, though it only wins after the cost of payroll and a separate tax return. The Cut It With an S-Corp tab gives a fast read, and the S-Corp Tax Calculator runs the full comparison.
Finally, none of this is withheld for you, so plan to pay it in quarterly installments alongside your income tax. The quarterly estimated tax calculator turns your combined income and self-employment tax into a set-aside percentage and four due dates, so you're not caught short in April.
Frequently Asked Questions
What is self-employment tax for 2026?
Self-employment tax is the self-employed person's version of the Social Security and Medicare taxes a job withholds from a paycheck. Because you're both the employer and the employee, you pay both halves — a combined 15.3% (12.4% for Social Security plus 2.9% for Medicare). It's calculated on Schedule SE and applies to 92.35% of your net profit. For 2026 the Social Security portion only applies to the first $184,500 of earnings; Medicare has no cap. It's a separate tax from federal income tax — you owe both.
How is self-employment tax calculated?
Start with your net profit from Schedule C, then multiply by 92.35% to get your net earnings from self-employment (this removes the employer-half of the tax before it's applied). You pay 12.4% Social Security tax on those earnings up to the $184,500 cap for 2026, plus 2.9% Medicare tax on all of them. Add the two together for your self-employment tax. For example, $60,000 of net profit gives $55,410 of net earnings, which owes about $8,478 in self-employment tax — an effective 14.1% of profit.
What is the self-employment tax rate in 2026?
15.3% — made up of 12.4% Social Security and 2.9% Medicare. The 12.4% Social Security part stops once your net earnings reach $184,500 for 2026, so very high earners pay a lower blended rate. The 2.9% Medicare part never stops, and high earners pay an extra 0.9% Additional Medicare Tax on self-employment income above $200,000 (single) or $250,000 (married filing jointly). Because the tax runs on 92.35% of profit, the effective rate on profit is about 14.1% until you hit the Social Security cap.
Do I really pay the full 15.3%? What is the deduction?
Not quite. You get to deduct half of your self-employment tax as an above-the-line deduction on Schedule 1 — it lowers your adjusted gross income and therefore your income tax. So while the tax itself is 15.3% of your net earnings, the half-deduction claws some of it back through a lower income-tax bill. For someone in the 22% bracket, the real cost of self-employment tax works out closer to 12–13% of profit rather than the headline 15.3%. The True Cost tab shows this for your numbers.
Do I owe self-employment tax if I also have a W-2 job?
Yes — you still owe the 2.9% Medicare part on all of your self-employment earnings, and the 12.4% Social Security part on your self-employment earnings too. But the Social Security cap is shared: the wages your employer already taxed for Social Security use up part of the $184,500 limit first. If your W-2 wages are already at or above $184,500, you skip the 12.4% Social Security portion on your side income and only pay the 2.9% Medicare part. Enter your W-2 wages in the SE Tax tab and the calculator accounts for this automatically — something most free calculators miss.
How can I reduce my self-employment tax?
Two levers. First, lower your net profit with legitimate business deductions — the home office, business mileage, health insurance premiums, and retirement contributions all reduce the profit the 15.3% is calculated on. Second, once your profit is high enough (often around $60,000–$80,000 and up), electing S-corporation status lets you split income into a reasonable salary (which still pays payroll tax) and distributions (which don't pay self-employment tax), saving on the distribution portion — minus the cost of running payroll. The Cut It With an S-Corp tab gives a quick estimate, and the S-Corp calculator runs the full comparison including income tax and QBI.
When do I pay self-employment tax?
You report and pay it with your annual return, on Schedule SE filed with your Form 1040. But because nothing is withheld from freelance income, the IRS expects you to pay as you go through quarterly estimated tax payments — usually April, June, September and the following January. Your quarterly payments should cover both your income tax and your self-employment tax combined. You only owe self-employment tax once your net earnings reach $400 in a year; below that there's no SE tax. Use the quarterly tax calculator to work out what to set aside each period.
Sources & how we calculate
We follow Schedule SE: net profit × 92.35% gives your net earnings from self-employment. The 12.4% Social Security tax applies to those earnings up to the 2026 wage base of $184,500 — reduced by any W-2 Social Security wages you enter — and the 2.9% Medicare tax applies to all of them. Where net earnings exceed the Additional Medicare Tax threshold for your filing status ($200,000 single, $250,000 married filing jointly, $125,000 married filing separately), we add 0.9% on the excess (Form 8959). The deductible half is 50% of the base 15.3% tax. The True Cost tab applies your marginal bracket to that half; the S-corp tab compares your Schedule SE tax with 15.3% payroll tax on a salary only. Everything runs in your browser from the figures you type; nothing is sent anywhere.
Estimate only, not tax advice. Your real numbers depend on your other income, deductions, state and filing details. Self-employment tax is only part of your bill — pair it with the Self-Employed Tax Calculator for income tax, and talk to a CPA or EA before filing.
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