How self-employment tax is calculated for 2026
Self-employment (SE) tax is the Social Security and Medicare tax for people who work for themselves. The steps below follow the 2026 Self-Employment Tax and Deduction Worksheet in Form 1040-ES, which mirrors Schedule SE.
Net earnings = net profit × 92.35%
Social Security = 12.4% × the smaller of net earnings and ($184,500.00 − W-2 Social Security wages)
Medicare = 2.9% × net earnings
SE tax = Social Security + Medicare
Deduction = SE tax × 50%
Additional Medicare Tax = 0.9% × net earnings above (threshold − W-2 wages)
No SE tax is due if net earnings are under $400. The quarterly figure shown is the SE tax plus any Additional Medicare Tax, divided by four. It does not include income tax.
Worked example: $60,000 of freelance profit
- Net earnings: $60,000 × 0.9235 = $55,410.00.
- Social Security: $55,410.00 × 12.4% = $6,870.84 (well under the $184,500.00 limit).
- Medicare: $55,410.00 × 2.9% = $1,606.89.
- SE tax: $6,870.84 + $1,606.89 = $8,477.73, about 14.1% of the profit.
- Deduction: half, $4,238.87, comes off your income before income tax is worked out.
- Set aside $2,119.43 each quarter for the SE tax alone.
At $300,000 of profit, net earnings are $277,050. Social Security stops at $184,500.00, so that part is capped at $22,878.00, while Medicare is $8,034.45. A single filer also owes 0.9% on the $77,050 above $200,000: $693.45 of Additional Medicare Tax.
2026 figures used and where they come from
| Figure | 2026 value | Source |
|---|---|---|
| Share of net profit taxed | 92.35% | Form 1040-ES (2026) SE worksheet, line 3 |
| Social Security rate | 12.4% | Form 1040-ES (2026) SE worksheet, line 9 |
| Social Security wage base | $184,500.00 | SSA contribution and benefit base; 1040-ES SE worksheet, line 5 |
| Medicare rate | 2.9% | Form 1040-ES (2026) SE worksheet, line 4 |
| Deductible share | 50% | Form 1040-ES (2026) SE worksheet, line 11 |
| Minimum net earnings | $400 | Schedule SE instructions |
| Additional Medicare Tax | 0.9% | Form 8959 instructions |
| Additional Medicare thresholds | $200,000 single, head of household or surviving spouse; $250,000 joint; $125,000 separate | IRS self-employment tax page; Form 8959 instructions |
Sources: the IRS Form 1040-ES (2026) page, About Schedule SE, Self-employment tax (Social Security and Medicare taxes), Instructions for Form 8959, Estimated taxes, and the Social Security Administration's contribution and benefit base.
An estimate, not tax advice. This covers self-employment tax for tax year 2026 only. It leaves out income tax, the optional methods, church employee income, farm income and the Conservation Reserve Program. For married couples filing jointly it assumes your spouse has no wages or self-employment income; the joint Additional Medicare threshold applies to the couple's combined amounts, so the real figure can be higher. Check your figures against Schedule SE or with a tax professional.
Questions people ask
What is the self-employment tax rate for 2026?
15.3% of 92.35% of your net profit: 12.4% for Social Security on net earnings up to $184,500.00, plus 2.9% for Medicare on all of it. That works out to about 14.13% of net profit for most people.
Why is only 92.35% of my profit taxed?
Employees only pay half of Social Security and Medicare; their employer pays the other half and deducts it. Multiplying by 92.35% (100% minus half of 15.3%) gives the self-employed the same treatment before the tax is worked out.
Can I deduct self-employment tax?
You deduct half of it (the "employer-equivalent portion") when working out your adjusted gross income, on Schedule 1 of Form 1040. It lowers your income tax, not the self-employment tax itself. The 0.9% Additional Medicare Tax is not part of that deduction.
Do I owe self-employment tax if I made under $400?
No. You only owe self-employment tax if your net earnings from self-employment (net profit × 92.35%) are $400 or more. You may still have to file a tax return for other reasons.
I also have a W-2 job. Does that change it?
Yes. Social Security wages from your job use up the $184,500.00 wage base first, so less of your self-employment income is hit by the 12.4%. Your wages also count toward the Additional Medicare Tax threshold. Enter them in the W-2 wages box.
Is this all the tax I will owe on my freelance income?
No. Self-employment tax is on top of federal income tax (and state income tax, where it applies). Quarterly estimated payments usually need to cover both. Use this as one piece of the estimate, and check Form 1040-ES or a tax professional for the full picture.