When you work for yourself, nobody withholds Social Security and Medicare tax from your pay. You pay both halves yourself through self employment tax, and for a lot of freelancers, gig drivers and small business owners it ends up bigger than their income tax.
The calculator above runs the 2026 math from Schedule SE. Enter your net profit and any W-2 wages, and it shows the tax, the deduction for half of it and a rough quarterly payment.
How self employment tax is figured
The rate is 15.3%. That’s 12.4% for Social Security and 2.9% for Medicare, the same total an employee and employer split between them on a paycheck.
It doesn’t apply to your full profit. You first multiply net profit by 92.35%. That adjustment stands in for the employer half of the tax, which an employee never pays tax on. So on $60,000 of profit:
- Net earnings from self employment: $60,000 times 92.35% = $55,410
- Social Security: 12.4% of $55,410 = $6,871
- Medicare: 2.9% of $55,410 = $1,607
- Total: $8,478, about 14.1% of profit
If your net earnings come to less than $400 for the year, you don’t owe self employment tax at all. You still report the income for income tax.
Two businesses are combined. If you drive for a delivery app and also sell crafts online, add the profit from both before applying the $400 test and the 92.35% step. A loss in one can offset profit in the other. For married couples, each spouse figures self employment tax on their own business income, even on a joint return.
The Social Security wage base for 2026
Social Security tax stops at a yearly cap. For 2026 it’s $184,500, up from $176,100 in 2025, according to the Social Security Administration. Medicare has no cap.
That’s why the tax rate falls for high earners. On $250,000 of profit, net earnings are $230,875. Social Security applies only to the first $184,500, so the total is $29,573, about 11.8% of profit.
People with a regular job and a side business share one cap across both. If your W-2 wages already reach $184,500, your side income owes only the 2.9% Medicare part. If your wages are $170,000, just $14,500 of your self employment earnings gets the 12.4%. The calculator handles this when you enter your wages.
The extra 0.9% Medicare tax
High earners pay an additional 0.9% Medicare tax on earnings above $200,000 for single and head of household filers, $250,000 for married couples filing jointly and $125,000 for married filing separately. W-2 wages count toward those thresholds first.
This tax is figured on Form 8959, not Schedule SE, and you can’t deduct half of it. The calculator shows it on a separate line.
The deduction for half
You can deduct half of your self employment tax when figuring income tax. It’s an adjustment to income, so you get it even if you take the standard deduction. On $8,478 of tax, the deduction is $4,239. In the 12% bracket that cuts income tax by about $509.
It doesn’t lower the self employment tax itself. And it’s separate from the qualified business income deduction, which can take up to 20% of business profit off your taxable income.
Ways to lower it before December 31
Self employment tax is based on profit, so the main lever is legitimate business expenses. A few that often get missed:
- Equipment and software you need and planned to buy anyway. Buying before year end can let you deduct it in 2026.
- Business mileage. The standard mileage rate covers gas and wear. Keep a log.
- Health insurance premiums for self employed people. These lower income tax but not self employment tax.
- A home office used regularly and only for business.
- A Solo 401(k) or SEP IRA. These cut income tax, though not self employment tax.
Spending money just to get a deduction rarely makes sense. A $1,000 expense saves at most a few hundred dollars in tax.
Our year end tax deadlines guide lists the moves that have to happen by December 31.
Paying during the year
Self employed people are expected to pay as they go. The fourth estimated payment for 2026 is due January 15, 2027. Use Form 1040-ES or IRS Direct Pay.
The calculator shows a quarterly share of self employment tax, but your payment should also cover income tax on the profit. If you also have a job, raising your W-4 withholding for the last few paychecks can cover it instead. Withholding counts as paid evenly through the year, even if it comes in December.
Our underpayment penalty calculator checks if what you’ve paid so far meets the safe harbor. The W-4 guide covers changing withholding.
Forms you may get in January
Clients who paid you $2,000 or more in 2026 should send a Form 1099-NEC. The threshold rose from $600 starting with 2026 payments. Payment apps and marketplaces send Form 1099-K once payments pass $20,000 and 200 transactions.
All of your self employment income is taxable, with or without a form. Keep your own records of what you were paid.
Questions people ask
Do I pay self employment tax on a side gig?
Yes, if your net earnings from it reach $400 for the year. It doesn’t matter that you also have a regular job, though your wages count toward the Social Security cap.
Is self employment tax the same as income tax?
No. It’s only Social Security and Medicare. Income tax is separate and figured on your total taxable income after deductions.
Do LLC owners pay it?
A single member LLC is usually taxed like a sole proprietorship, so yes. Owners of an LLC that elects S corporation status pay payroll tax on the salary they take instead.
Does self employment tax count toward my Social Security benefits?
Yes. It’s how self employed people earn work credits and build the earnings record that sets their benefit. Our claiming age calculator shows how that benefit changes with age.
An estimate of 2026 federal self employment tax using the $184,500 Social Security wage base. It does not include income tax, state tax, church employee income or the optional methods for low earners. Your Schedule SE determines the actual amount.