Self-Employment Tax Calculator
↻ Updated 2026See the Social Security and Medicare (self-employment) tax on your net business profit for 2026, including the additional 0.9% Medicare and the deductible half.
Educational calculators — always consult a licensed professional before making financial decisions.
Runs entirely in your browser — nothing you enter is sent to us.How this works
How to read your self-employment tax result
The headline rate is 15.3% but the effective rate on the defaults is 14.1%, and that gap is not rounding — it's the 92.35% adjustment doing its job. Self-employment tax is charged before income tax, on top of income tax, and is owed even in years when your income tax is zero. It is the largest tax most freelancers pay and the one they most often forget to price in.
How the 15.3% self-employment tax is worked out
Self-employment tax is FICA for people without an employer. A W-2 employee pays 7.65% and their employer pays a matching 7.65%; a sole proprietor is both parties, so they pay 15.3%. That's the whole idea, and everything else is an adjustment to make the two situations comparable.
The first adjustment is the 92.35% factor. An employer's share of FICA is a deductible business expense paid with pre-tax dollars, so before the rate is applied the code strips out an equivalent amount — 100% − 7.65% = 92.35% — leaving what Schedule SE calls net earnings from self-employment. The second adjustment comes later: half the resulting tax is deductible against income tax.
net earnings = net profit × 0.9235 Social Security = 12.4% × min(net earnings, $184,500) Medicare = 2.9% × net earnings + 0.9% × (net earnings − $200,000), if above SE tax = Social Security + Medicare deductible half = SE tax ÷ 2 marginal SE rate: 15.3% below the wage base 2.9% above it 3.8% above the additional-Medicare threshold
- net profit
- Business income after expenses — the bottom line of Schedule C — not revenue; every deductible expense you claim lowers this and therefore lowers SE tax directly
- net earnings
- 92.35% of net profit — the amount SE tax is actually charged on — the standing deduction that makes a sole proprietor comparable to an employer
- $184,500
- The 2026 Social Security wage base — SSA 2026 contribution and benefit base; above this, the 12.4% stops entirely
- additional Medicare threshold
- Where the extra 0.9% Medicare tax starts, by filing status — $200,000 single and head of household, $250,000 married filing jointly, $125,000 married filing separately — set by the filing-status selector
- deductible half
- One-half of SE tax, deducted against income tax — an above-the-line adjustment on Form 1040 — you get it whether or not you itemise (IRS Topic 554)
The three marginal rates matter more than the headline. Below the wage base every extra dollar of profit costs 15.3% of 92.35%, or 14.13%. Above it, Social Security stops and the marginal cost collapses to 2.9% of 92.35% — 2.68%. Above the additional-Medicare threshold it rises again to 3.8% of 92.35%. A freelancer's SE tax curve is not a straight line, and the flattest stretch is the most profitable one.
Because the tax is charged on profit rather than revenue, business expenses are worth more to a sole proprietor than deductions are to an employee: a legitimate $1,000 expense saves both income tax and 14.13% of SE tax. The 1099 vs W-2 calculator puts this tax next to the employee equivalent at the same headline pay.
Worked examples
Example: $80,000 of net profit from a Schedule C business
The calculator's default. A sole proprietor whose revenue minus expenses came to $80,000 for the year.
| Net profitafter business expenses | $80,000 |
| Net earnings (× 92.35%)what SE tax is charged on | $73,880 |
| Social Security (12.4%)12.4% of $73,880 — under the wage base | $9,161 |
| Medicare (2.9%)2.9% of $73,880 — no cap, no surtax here | $2,143 |
| Total SE tax$9,161 + $2,143 | $11,304 |
| Effective rate on profitnot 15.3% — the 92.35% factor | 14.1% |
| Deductible halfan income adjustment, not a tax credit | $5,652 |
$11,304 before a cent of income tax. The effective rate is 14.1% rather than 15.3% because the 92.35% adjustment removed $6,120 of profit from the base before the rate touched it. Note what the deductible half is and isn't: $5,652 comes off your income, which at a 22% marginal rate is worth about $1,243 — it does not halve the $11,304.
Example: $250,000 of net profit — past the wage base
Drag the profit slider to $250,000. The Social Security portion hits its ceiling, and the shape of the tax changes.
| Net earnings (× 92.35%)92.35% of $250,000 | $230,875 |
| Social Security (12.4%)capped — 12.4% of $184,500, not of $230,875 | $22,878 |
| Medicare (2.9% + 0.9%)2.9% on all of it, plus 0.9% on $30,875 | $6,973 |
| Total SE tax$22,878 + $6,973 | $29,851 |
| Effective rate on profitdown from 14.1% | 11.9% |
| Deductible halfhalf of $29,851 | $14,926 |
Profit rose 213% and SE tax rose only 164%, so the effective rate fell from 14.1% to 11.9%. Social Security stopped at $22,878 and will not rise again this year no matter how much more the business earns. Above the wage base the marginal cost of the next dollar of profit is 2.68% rather than 14.13% — self-employment tax is regressive by design, because the benefit it buys is capped too.
Frequently asked questions
Why is self-employment tax 15.3% when FICA is 7.65%?
Because you're paying both halves. A W-2 employee has 6.2% Social Security and 1.45% Medicare withheld — 7.65% — and their employer quietly pays an identical 7.65% that never appears on the payslip. Self-employed, there is no employer, so both halves land on you: 12.4% plus 2.9% is 15.3% (IRS Topic 554).
The tax was never 7.65% for anyone; employees just don't see the other half. Two adjustments soften the blow. The 92.35% factor takes the employer's share out of the base first, and one-half of the resulting tax is deductible against income tax — which is why the effective rate on the $80,000 default is 14.1%, not 15.3%.
Why is self-employment tax calculated on 92.35% of net profit?
Because 92.35% is 100% minus 7.65%, and 7.65% is the employer's half of FICA. An employer deducts its share as a business expense, so it pays that tax with pre-tax dollars. To put a sole proprietor in the same position, Schedule SE removes an equivalent slice from net profit before applying the rate.
Doing it any other way would require a circular calculation — the tax depends on the base, the base depends on the deduction, the deduction depends on the tax. The 92.35% multiplier is the closed-form solution to that loop. On the $80,000 default it removes $6,120 from the base and saves $936 of SE tax, which is the entire distance between the 15.3% headline and the 14.1% you actually pay.
Do I have to pay self-employment tax if I made less than $600?
The $600 figure is not a tax threshold — it's the point at which a client must issue you a Form 1099-NEC. The number that governs your liability is $400: you owe self-employment tax once net earnings from self-employment reach $400 for the year (IRS, Self-Employment Tax; IRS Topic 554).
So the two thresholds pull in opposite directions from what people assume. Earn $500 from one client and you get no 1099, and you still owe SE tax. Earn $300 and you owe none, whether or not paperwork arrives. Income is reportable regardless of the form — the 1099 tells the IRS about money you were already required to report.
How much should I set aside for taxes as a 1099 contractor?
Set-aside guidance is not something this page will give you, but the arithmetic underneath it is on this calculator. SE tax on the $80,000 default is $11,304 — 14.1% of profit — and that's before income tax on the same profit. Add federal income tax at 2026 brackets, and the combined federal bill on $80,000 of net self-employment income is $18,830, or 23.5% of profit.
That 23.5% is federal only, single, standard deduction, no credits and no state tax. Where the quarter-to-a-third rules of thumb come from is roughly this calculation plus a state. The reason SE tax is the part people miss is that it doesn't scale with your bracket — a freelancer earning $30,000 pays the same 14.1% rate on profit as one earning $150,000. The quarterly tax calculator runs the combined figure and splits it four ways.
Where this SE tax calculator stops short of Schedule SE
One number in, one tax out. Schedule SE has more moving parts than that, and two of the gaps below can move your answer materially.
- The additional Medicare tax ignores your other income — The 0.9% threshold is tested against your combined wages and self-employment earnings on Form 8959, not against your Schedule C profit alone. Hold a W-2 job alongside the business and the real surtax starts earlier than this page shows — the calculator has no field for wages.
- No income tax, and no QBI deduction — This is Social Security and Medicare only. The qualified business income deduction under §199A can remove up to a fifth of qualifying business income from taxable income, and it doesn't appear anywhere here — it reduces income tax, never SE tax.
- The wage base doesn't know about your W-2 job — Social Security caps at $184,500 across all your earnings, wages and self-employment combined, with wages counted first. If you earned $150,000 in a W-2 job, only $34,500 of net earnings remains subject to the 12.4% — this tool would charge the full amount.
- S corporations and partnerships — The model is a sole proprietor filing Schedule C. An S corporation owner pays FICA on a reasonable salary and no SE tax on distributions, which is the entire reason the structure exists. Partnership and farm income follow their own Schedule SE paths.
Rates, brackets and limits here are checked against primary sources. If a number still looks off, email support@realmoneyiq.com and we'll review and fix it.
RealMoneyIQ provides free educational calculators, not financial, tax, investment or legal advice. Results are estimates based on the assumptions you enter and publicly published rates; your actual outcome will differ. Always confirm decisions with a licensed professional who knows your full situation.