Self-Employment Tax Calculator

How it works

Self-employed people pay both the employee and the employer share of Social Security and Medicare, through self-employment (SE) tax on Schedule SE. The tax is not charged on your whole profit: you first multiply net profit by 92.35%, which stands in for the employer half you would have deducted as a business. That figure is your net earnings from self-employment, and if it is under $400 you owe no SE tax.

Net earnings are taxed at 12.4% for Social Security, but only up to the year's Social Security wage base ($184,500 for 2026), and at 2.9% for Medicare with no cap. W-2 wages from a job use up the wage base first, so someone with a salary near the cap pays little or no Social Security tax on side income.

Half of the SE tax is deducted from your income when you work out income tax (it lowers adjusted gross income, not the SE tax itself). Separately, the Additional Medicare Tax of 0.9% applies to self-employment income above a threshold set by filing status; your wages (and, on a joint return, your spouse's wages) reduce that threshold first. That tax is not part of the deductible half.

Formula

net earnings = net profit × 0.9235        (zero tax if under $400)
wage base left = max(0, Social Security wage base − W-2 wages)
Social Security = 0.124 × min(net earnings, wage base left)
Medicare = 0.029 × net earnings
SE tax = Social Security + Medicare        deductible half = SE tax ÷ 2
Additional Medicare = 0.009 × max(0, net earnings − max(0, threshold − wages))
threshold: $200,000 single, HoH, QSS; $250,000 joint; $125,000 separate

Example

A single freelancer with $60,000 of net profit in 2026 and no other job has net earnings of $60,000 × 92.35% = $55,410. Social Security is 12.4% of that, $6,870.84, and Medicare 2.9%, $1,606.89, so self-employment tax is $8,477.73, of which $4,238.87 is deductible.

If the same person also earned $150,000 in W-2 wages, only $34,500 of the $184,500 wage base is left, so Social Security falls to $4,278.00 and SE tax to $5,884.89. Their wages also lower the $200,000 Additional Medicare threshold to $50,000, so $5,410 of net earnings is taxed at 0.9%: $48.69, for a total of $5,933.58.

Assumptions and limitations

• Figures come from the shared federal tax data for the year you choose: the Social Security wage base ($184,500 for 2026, IRS Publication 15 (2026)), the SE rates and 92.35% factor (IRC §1401, §1402; Schedule SE) and the Additional Medicare thresholds (IRC §1401(b)(2); Instructions for Form 8959), which are fixed by statute and not indexed.
• Uses the Schedule SE regular method. The farm and nonfarm optional methods, church employee income and Conservation Reserve Program payments are not modelled. Net profit is one person's combined profit from all businesses; each spouse figures SE tax separately.
• W-2 wages are assumed to be both Social Security wages and Medicare wages (true unless you have pre-tax benefits that differ between them). Tips reported to your employer and Railroad Retirement compensation are not modelled.
• Only the Additional Medicare Tax on self-employment income is shown. Tax on wages above the threshold (Form 8959 Part I) is separate and largely withheld by your employer.
• SE tax is owed in addition to income tax and is usually paid through quarterly estimated payments.
• Results are estimates for planning and are for informational and educational purposes only. They are not financial, tax or legal advice.

Frequently asked questions