Self-employment tax calculator
Freelancers, contractors and sole proprietors pay both halves of Social Security and Medicare. Here is exactly how much, and how Schedule SE gets there.
That is 14.1% of profit, before any income tax. For the full picture including income tax and QBI, use the 1099 tax calculator.
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Walk through Schedule SE
Step 1 of 5, using your numbers.
Start with net profit
Gross 1099 income $60,000 minus business expenses $8,000 = $52,000. This is Schedule C line 31.
Lowering self-employment tax, legally
- Claim every business expense. SE tax is on profit, so each $100 of legitimate expense saves about $14 of SE tax plus income tax. Home office, mileage (70¢ a mile in 2025), software and a share of your phone all count.
- Retirement contributions do not reduce it. A SEP-IRA or solo 401(k) cuts income tax, not SE tax. That surprises many freelancers.
- S corporation election. Once profit is well above a reasonable salary for your work, an S corp can pay you a salary (subject to FICA) plus distributions (not subject to it). It adds payroll costs and filing work; ask a CPA before switching.
Next step: see what to set aside overall with the 1099 tax calculator, or check the QBI deduction.
Questions people ask
What is self-employment tax?
It is Social Security and Medicare tax for people who work for themselves. An employee and employer each pay 7.65% of wages; a self-employed person pays both halves, 15.3%, on net earnings. It is reported on Schedule SE and is due even if you owe no income tax.
What is the self-employment tax rate for 2026?
The rate is 15.3%: 12.4% for Social Security on net earnings up to the $184,500 wage base (2026), and 2.9% for Medicare on all earnings. An extra 0.9% Medicare tax applies above $200,000 single or $250,000 married filing jointly.
Why is it calculated on 92.35% of profit?
Employees don’t pay FICA on the employer’s half. To match that, Schedule SE multiplies net profit by 92.35% (100% minus half of 15.3%) before applying the rate. It makes the effective rate on profit about 14.13%.
Do I have to pay it if I made less than $400?
No. If net earnings from self-employment (after the 92.35% step) are under $400, there is no self-employment tax. Income tax may still apply.
Can I deduct self-employment tax?
Half of it. The employer-equivalent half is an adjustment to income on Schedule 1, which lowers your income tax (not the SE tax itself). This calculator shows that deduction.
Does W-2 income change my self-employment tax?
Only the Social Security part. W-2 wages count toward the same $184,500 cap first, so if you have a high-paying job, less of your side income is hit by the 12.4%.