Self-employment tax in 2026, explained

Self-employment tax is Social Security and Medicare for people who work for themselves. An employer would normally pay half; when you're self-employed you pay both halves.

Updated 28 September 2026 · 2026 tax year

The rate: 15.3%

12.4% Social Security on net earnings up to the 2026 wage base of $184,500.
2.9% Medicare on all net earnings, with no cap.
0.9% Additional Medicare Tax on earnings above $200,000 (single) or $250,000 (married filing jointly).

W-2 wages count toward the same $184,500 wage base, so if you also have a job, less of your self-employment income is hit by the 12.4% part.

What it's charged on: 92.35% of your profit

Self-employment tax isn't charged on revenue, and not quite on profit either. Start with your net profit from Schedule C (income minus business expenses) and multiply by 92.35%. That trims off the equivalent of the employer's half, which an employee never pays tax on. You calculate it on Schedule SE.

If your net earnings from self-employment are under $400 for the year, you don't owe it.

Worked example

Step	Amount
Net profit from Schedule C	$60,000
× 92.35% = net earnings from self-employment	$55,410
Social Security 12.4%	$6,871
Medicare 2.9%	$1,607
Self-employment tax	$8,478
Deduction for half of it (reduces income tax)	$4,239

Income tax comes on top. The quarterly tax calculator works out both and splits them into your four estimated payments.

The half-SE-tax deduction

You can deduct half of your self-employment tax (the Social Security and regular Medicare part) when working out your adjusted gross income. It lowers your income tax, not the self-employment tax itself.

How to pay less, legally

Claim every business expense. Each dollar of expense cuts profit, and so cuts both taxes. Common ones: software, equipment, phone and internet (business share), home office, and business miles.
Retirement contributions (SEP IRA, solo 401(k)) cut income tax but not self-employment tax.
An S corporation can reduce it once profit is high enough: you pay payroll tax only on a reasonable salary, not on the rest of the profit. It adds payroll and filing costs, so run the numbers first.

You owe it with or without a 1099

Clients send a Form 1099-NEC only above a reporting threshold (raised to $2,000 for payments made from 2026), and payment apps send a 1099-K only above theirs. Neither changes what you owe: all self-employment income is taxable and goes on your return.

General information for planning, not tax advice. See the IRS instructions for Schedule SE.