Self Employment Tax
If you're self-employed, you pay both the employer and employee share of Social Security and Medicare taxes. This calculator shows exactly what you owe — and how to reduce it.
1 Your Self-Employment Income
Revenue minus business expenses (before taxes)
2 Deductions (Optional)
Self-Employment Tax
for 2026 (estimated)
Quarterly Estimated Payments
To avoid underpayment penalties, pay these to the IRS:
What Is Self-Employment Tax?
When you work for an employer, they pay half of your Social Security and Medicare taxes (7.65%), and you pay the other half through payroll deductions. When you're self-employed, you're both the employer and employee — so you pay both halves: the full 15.3%.
The tax applies to 92.35% of your net self-employment income (the IRS allows this adjustment to account for the employer half). The good news: you can deduct 50% of what you pay in SE tax from your gross income on your federal tax return.
2026 SE Tax Rate Breakdown
FAQs
No. You only need to pay self-employment tax if your net self-employment income is $400 or more in a year.
Use IRS Form 1040-ES. You can pay online at IRS Direct Pay (free) or EFTPS. The 2026 due dates are April 15, June 16, September 15, and January 15, 2027.
You can't reduce the SE tax itself much, but you can reduce your taxable income using deductions like a SEP-IRA (up to 25% of net earnings), health insurance premiums, and legitimate business expenses. At higher income levels, electing S-Corp status can reduce SE tax significantly.
The IRS charges an underpayment penalty (currently around 8% annualized). To avoid it, you need to pay at least 90% of your current year tax or 100% of last year's tax (110% if income was over $150K).
About the Self-Employment Tax Calculator
Self-employment tax (SE tax) is the Social Security and Medicare contribution every freelancer, contractor and small business owner owes on top of regular income tax. The IRS rate is 15.3% on the first $168,600 of net earnings (2024) — that is BOTH the employee and employer halves combined. Our calculator estimates exactly what you owe so you do not get a five-figure surprise at tax time.
How to use it
- Enter your net self-employment income (gross 1099/business income minus business expenses).
- The calculator multiplies by 92.35% (the "deductible portion") then by 15.3% to get your SE tax.
- You will see Social Security portion (12.4%) capped at the Social Security wage base.
- Medicare portion (2.9%) applies to all earnings, plus a 0.9% Additional Medicare Tax above $200k single / $250k married.
- Use the result to plan quarterly estimated tax payments (April, June, September, January).
Formula & methodology
SE tax = Net earnings × 0.9235 × 0.153 (until SS wage base, then 0.9235 × 0.029 + Additional Medicare 0.009 above thresholds). You can deduct half of SE tax on your 1040 above the line.
Common use cases
- Estimating quarterly estimated tax payments (Form 1040-ES)
- Planning a Solo 401(k) or SEP-IRA contribution against true net income
- Comparing whether to elect S-Corp status (S-Corps avoid SE tax on the salary/distribution split)
- Setting aside the right percentage of every client invoice in a tax savings account
Frequently asked questions
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