Data Guide
Self-Employment Tax Rate 2026 — 15.3% SE Tax Guide
The self-employment tax rate for 2026 is 15.3% of net earnings — consisting of 12.4% for Social Security (up to the wage base of $176,100) and 2.9% for Medicare (no wage limit). An additional 0.9% Medicare surtax applies to earnings over $200,000 ($250,000 married filing jointly).
What Is Self-Employment Tax?
Self-employment tax (SE tax) is the equivalent of the FICA (Federal Insurance Contributions Act) tax that W-2 employees and their employers pay for Social Security and Medicare. When you work for an employer, they pay half of FICA (7.65%) and you pay the other half (7.65%) through payroll withholding, for a total of 15.3%.
As a self-employed individual, you are both the employee and the employer for tax purposes. This means you pay both halves of the tax — the full 15.3% of your net earnings from self-employment. However, Congress provides a tax deduction to offset the employer-equivalent portion (see "Deducting Half of SE Tax" below).
SE tax is separate from income tax. You pay both income tax and SE tax on your self-employment earnings. The SE tax is calculated on Schedule SE (Form 1040) and the total is filed with your Form 1040.
Use our self-employed tax refund calculator to estimate your combined income tax and SE tax liability.
15.3% Rate Breakdown
The 15.3% self-employment tax rate is composed of two parts:
| Component | Rate | Applies To | Maximum |
|---|---|---|---|
| Social Security (OASDI) | 12.4% | Net earnings up to the annual wage base | $176,100 (2025) |
| Medicare (HI) | 2.9% | All net earnings, no cap | No limit |
| Total SE Tax | 15.3% | Net earnings up to SS wage base + all earnings for Medicare | Varies by income |
The Social Security portion is subject to an annual wage base limit — for 2025, the maximum amount of net earnings subject to the 12.4% Social Security portion is $176,100. Earnings above this amount are not subject to the Social Security portion of SE tax, but the 2.9% Medicare portion applies to all net earnings with no upper limit.
The wage base is adjusted annually for inflation. The 2026 wage base has not yet been announced but is projected to be approximately $180,000 based on current wage growth trends.
Additional Medicare Tax (0.9%)
High-income self-employed individuals may also owe the Additional Medicare Tax of 0.9% on wages and self-employment income exceeding certain thresholds. This is in addition to the regular 2.9% Medicare portion of SE tax, bringing the total Medicare rate to 3.8% for high earners.
Additional Medicare Tax thresholds (not indexed for inflation):
| Filing Status | Threshold |
|---|---|
| Married Filing Jointly | $250,000 |
| Married Filing Separately | $125,000 |
| Single / Head of Household / Qualifying Widow(er) | $200,000 |
If your combined wages and self-employment income exceed your filing status threshold, you owe an additional 0.9% on the excess. Unlike the regular 2.9% Medicare portion, the Additional Medicare Tax is not deductible as part of the SE tax deduction.
Who Pays SE Tax?
You must pay self-employment tax if your net earnings from self-employment are $400 or more in a tax year. Net earnings are calculated as your net profit from your trade or business (reported on Schedule C, Schedule F, or Schedule K-1) multiplied by 92.35%.
Special situations:
- Church employees: If you work for a church or qualified church-controlled organization that elected exemption from Social Security and Medicare taxes, you may owe SE tax on earnings of $108.28 or more.
- Certain farm income: Special rules apply to farm income and may have a lower threshold in some cases.
- Nonresident aliens: Generally not subject to SE tax on self-employment income earned in the U.S., with some exceptions.
- Minors: Self-employment income earned by a minor is subject to SE tax if net earnings are $400 or more.
If you have both W-2 wages and self-employment income, the Social Security portion of your SE tax is adjusted to account for FICA taxes already paid through your W-2 job (see "SE Tax vs W-2 FICA" below).
How to Calculate Net Earnings
The IRS uses a specific formula to calculate net earnings from self-employment for SE tax purposes:
- Calculate net profit from Schedule C (or Schedule F for farming). This is your gross business income minus allowable business deductions.
- Multiply by 92.35% — The IRS excludes the employer-equivalent portion of SE tax from the earnings base. Multiply your Schedule C net profit by 92.35% to get your net earnings from self-employment.
- Apply the $400 threshold — If net earnings are less than $400, no SE tax is due. If $400 or more, SE tax applies.
- Calculate SE tax — On Schedule SE, apply the 12.4% Social Security rate to net earnings up to the wage base and the 2.9% Medicare rate to all net earnings.
Example: Schedule C net profit = $50,000. Net earnings = $50,000 × 92.35% = $46,175. SE tax = ($46,175 × 12.4%) + ($46,175 × 2.9%) = $5,725.70 + $1,339.08 = $7,064.78.
Complete the calculation on Schedule SE (Form 1040) and transfer the SE tax amount to Schedule 2 (Additional Taxes), Line 4, which flows to Form 1040.
Deducting Half of SE Tax
One of the most important tax benefits for self-employed individuals is the ability to deduct half of your SE tax (the employer-equivalent portion) as an above-the-line adjustment to income. This deduction:
- Reduces your adjusted gross income (AGI)
- Is available whether or not you itemize deductions
- Does not reduce your net earnings from self-employment
- Does not reduce your SE tax liability itself
- Is reported on Schedule 1 (Form 1040), Line 15
Example: If your SE tax is $7,064.78, you can deduct $3,532.39 (half) as an above-the-line adjustment. This reduces your AGI by $3,532.39, which may also reduce your income tax liability and potentially qualify you for other tax benefits that phase out based on AGI.
The deduction is calculated on Schedule SE and transferred to Schedule 1. The IRS allows this deduction to equalize the tax treatment between self-employed individuals and W-2 employees (whose employers deduct the employer half of FICA as a business expense).
Self-employed individuals who use their vehicle for business can deduct mileage using the 2026 standard mileage rate — a simple alternative to tracking actual vehicle expenses.
Social Security Wage Base
The Social Security wage base is the maximum amount of earnings subject to the 12.4% Social Security portion of FICA and SE tax. For 2025, the wage base is $176,100. Historical and projected wage bases:
| Year | Social Security Wage Base | Increase |
|---|---|---|
| 2024 | $168,600 | — |
| 2025 | $176,100 | +$7,500 (+4.4%) |
| 2026 (projected) | ~$180,000 | ~+$3,900 |
If your net earnings from self-employment exceed the wage base, the Social Security portion of your SE tax is capped. For example, if your net earnings are $200,000, only the first $176,100 is subject to the 12.4% Social Security rate (capped at $21,836.40), while the full $200,000 is subject to the 2.9% Medicare rate ($5,800), for a total of $27,636.40.
If you also have W-2 wages, the combined total subject to the Social Security portion cannot exceed the wage base. See the next section for how this works.
SE Tax vs W-2 FICA
Understanding the relationship between SE tax and W-2 FICA is important if you have both types of income:
| Comparison | W-2 Employee | Self-Employed (1099) |
|---|---|---|
| Social Security rate | 6.2% (employee) + 6.2% (employer) = 12.4% | 12.4% (all paid by you) |
| Medicare rate | 1.45% (employee) + 1.45% (employer) = 2.9% | 2.9% (all paid by you) |
| Total rate | 7.65% you see + 7.65% employer pays | 15.3% you pay |
| Deduction for employer half | Employer deducts their half as business expense | You deduct half as above-the-line adjustment |
| Wage base coordination | Separate employer/employee shares both up to wage base | Combined with W-2 wages for wage base limit |
If you have both W-2 wages and self-employment income, the Social Security portion (12.4%) only applies to the amount that does not exceed the wage base. For example, if you have $100,000 in W-2 wages and $100,000 in self-employment net earnings, your combined total is $200,000. The Social Security portion applies to the first $176,100 — your W-2 wages cover $100,000 of that, so only $76,100 of your self-employment net earnings are subject to the 12.4% Social Security rate.
Quarterly Estimated Payments
Since self-employment tax is not withheld from your income, you must pay it through quarterly estimated tax payments using Form 1040-ES. Your estimated payments should cover both income tax and SE tax.
Estimated tax due dates for the 2025 tax year:
- 1st Quarter: April 15, 2026
- 2nd Quarter: June 15, 2026
- 3rd Quarter: September 15, 2026
- 4th Quarter: January 15, 2027
To avoid the underpayment penalty, pay at least 90% of your current year's total tax (income tax + SE tax) or 100% of your prior year's total tax (110% if your AGI was over $150,000). Use IRS Direct Pay or the IRS2Go app for electronic payments. See our estimated tax payments guide for detailed instructions on calculating and paying quarterly estimates.
Use our self-employed tax refund calculator to estimate your combined income tax and SE tax liability for the year and determine the right amount for your quarterly payments.
Examples for Different Income Levels
The following examples illustrate how SE tax is calculated at different income levels. All examples assume no W-2 wages for simplicity.
Example 1: $30,000 Net Profit (Part-Time Gig Worker)
- Net earnings: $30,000 × 92.35% = $27,705
- SE tax: $27,705 × 15.3% = $4,238.87
- Deductible half: $2,119.43
Example 2: $80,000 Net Profit (Full-Time Freelancer)
- Net earnings: $80,000 × 92.35% = $73,880
- Social Security portion: $73,880 × 12.4% = $9,161.12
- Medicare portion: $73,880 × 2.9% = $2,142.52
- Total SE tax: $11,303.64
- Deductible half: $5,651.82
Example 3: $200,000 Net Profit (High-Income Professional)
- Net earnings: $200,000 × 92.35% = $184,700
- Social Security portion: $176,100 (wage base) × 12.4% = $21,836.40
- Medicare portion: $184,700 × 2.9% = $5,356.30
- Total SE tax: $27,192.70
- Deductible half: $13,596.35
- Additional Medicare Tax: ($200,000 - $200,000 single threshold) × 0.9% = $0 (if single; $0 if below $200K)
Frequently Asked Questions
As a tax content specialist, I verify every detail in this guide against IRS Schedule SE instructions, IRS Publication 334 (Tax Guide for Small Business), and IRS Publication 15 (Employer's Tax Guide). The self-employment tax rate and wage base are updated annually by the Social Security Administration, and I update this guide each tax season to reflect current figures, thresholds, and the Additional Medicare Tax rules for high earners.
— Lead Tax Content Strategist, TaxCalcHQ