Self-Employment Tax 2026 Explained (With Examples)

Self-employment tax for 2026 is 15.3% of 92.35% of your net self-employment profit: 12.4% for Social Security on up to $184,500 of net earnings, plus 2.9% for Medicare with no cap. You owe it once net earnings reach $400, and you can deduct half of it when figuring your income tax. Higher earners may also owe the 0.9% Additional Medicare Tax.

All figures are for the 2026 tax year (returns filed in 2027) and will be updated when the IRS publishes new numbers.

What self-employment tax is

Employees split Social Security and Medicare tax with their employer: each pays 7.65%. When you work for yourself, you're both, so you pay both halves. The IRS calls this self-employment tax, and you figure it on Schedule SE.

It applies to sole proprietors, single-member LLCs taxed as sole proprietorships, independent contractors, freelancers and most general partners. It's separate from, and in addition to, federal income tax.

The 2026 rates

How to calculate it, step by step

The deductible half lowers your income tax, not your SE tax.

Example 1: $50,000 of profit

A single freelancer has $50,000 of net profit and no other income.

Adjusted gross income is $46,468. After the $16,100 standard deduction and the 20% QBI deduction, estimated federal income tax is about $2,667. Total federal tax on the business is about $9,732, or 19.5% of profit, and SE tax is the bigger part.

Example 2: $120,000 of profit

Estimated income tax is about $11,506, for a total of about $28,462, or 23.7% of profit. The next dollar of profit costs about 30.5 cents in combined federal tax at this level: 22% income tax plus SE tax, partly offset by the deductions.

Example 3: $250,000 of profit (above the wage base)

Above the wage base, each extra dollar of profit carries only the Medicare portion of SE tax, which is why SE tax grows more slowly at high incomes.

Example 4: W-2 job plus a side business

A single filer earns $170,000 in W-2 wages and $30,000 of side-business profit. Net SE earnings are $27,705. Because the job already used $170,000 of the $184,500 wage base, only $14,500 of the side income gets Social Security tax:

Without the W-2 wages, the same $30,000 would carry $4,239 of SE tax. The Self-Employment Tax Calculator handles this when you enter your W-2 wages.

Ways to legally lower SE tax

To see where the S corp break-even sits, read S corp vs LLC: when the election saves tax.

Paying it during the year

No one withholds SE tax for you, so you generally pay it through quarterly estimated payments along with your income tax. See quarterly estimated taxes 2026 for due dates and the safe-harbor rules.

Why it's not all bad news

SE tax earns you Social Security credits and counts toward your future benefit and Medicare eligibility. Reporting all your self-employment income protects those benefits.

When to talk to a CPA or enrolled agent

Get help if you have income from several businesses or partnerships, are a church employee or minister (special rules apply), earn near the wage base from a mix of W-2 and self-employment, or have a loss in one business and profit in another. A CPA or enrolled agent can also tell you whether an S corp election or a different structure makes sense.

Related guides

Freelancers paid on 1099s should also read 1099 contractor taxes: what to set aside. For deductions that reduce both taxes, see tax-saving strategies for small businesses.

Estimate your own 2026 SE tax with the Self-Employment Tax Calculator.

This guide is general information, not tax advice. Figures are for the 2026 tax year and will be updated as the IRS releases new figures.