What is self-employment tax?

Self-employment (SE) tax is the tax self-employed individuals pay to fund Social Security and Medicare. It's the self-employed equivalent of the FICA payroll tax that W-2 employees split with their employers. The SE tax rate is 15.3% on net earnings: 12.4% for Social Security (up to the annual wage base) and 2.9% for Medicare (on all net earnings). You compute it on Schedule SE and file it with your Form 1040.

How is self-employment tax calculated?

First, multiply your Schedule C net profit by 92.35% to get net SE earnings. Then apply 12.4% to the portion of net earnings up to the Social Security wage base ($176,100 for 2026) for the Social Security tax, and 2.9% to all net earnings for the Medicare tax. Add the two together for total SE tax. Half of the total SE tax is deductible against your income tax as an above-the-line deduction.

What is the deductible half of SE tax?

Employers pay half of FICA for their employees (7.65%); self-employed people pay both halves (15.3%). To mirror this, the IRS lets you deduct half of your SE tax from your adjusted gross income (AGI). This is an above-the-line deduction — you get it automatically on Schedule SE whether or not you itemize. It reduces your taxable income for federal income tax but does not reduce the SE tax itself.

Do I need to pay quarterly estimated taxes?

Yes, if you expect to owe at least $1,000 in tax for the year. Self-employed individuals generally must pay quarterly estimated taxes (April 15, June 15, September 15, January 15) covering both SE tax and income tax. Underpayment can trigger penalties. Use Form 1040-ES to calculate and pay each quarter. Many self-employed filers set aside 25%–30% of profit for federal taxes to avoid surprises.

What is the Social Security wage base for 2026?

The 2026 projected Social Security wage base is $176,100. The 12.4% Social Security portion of SE tax applies only to the first $176,100 of net SE earnings. Above that cap, only the 2.9% Medicare portion continues. Note that net earnings (Schedule C profit × 92.35%) must exceed the cap for the cap to apply — high earners effectively pay a much lower marginal SE rate above the wage base.

Is there an Additional Medicare Tax for high earners?

Yes. The Additional Medicare Tax is 0.9% on earned income above $200,000 (single) or $250,000 (married filing jointly). It applies to wages, self-employment income, and railroad retirement compensation. This calculator estimates the base 2.9% Medicare portion of SE tax but does not include the 0.9% Additional Medicare Tax. If your net SE earnings exceed these thresholds, budget for the extra 0.9% on the excess.

Can I reduce my self-employment tax?

SE tax itself is hard to reduce directly — it applies to net SE earnings regardless of retirement contributions. The most effective lever is reducing Schedule C net profit by deducting all legitimate business expenses (home office, vehicle, supplies, professional development, health insurance premiums for the self-employed, and half of self-employment tax itself is deducted on the 1040, not Schedule C). Contributing to a SEP-IRA, SIMPLE IRA, or solo 401(k) reduces income tax but not SE tax.

Does this calculator include state taxes or federal income tax?

This calculator estimates SE tax plus federal income tax on the remaining profit (after the deductible-half deduction and itemized/standard deductions). It does not include state income taxes, the 0.9% Additional Medicare Tax, or the Net Investment Income Tax. For self-employed filers, SE tax and federal income tax together typically represent the bulk of the federal burden. Your actual total tax may be higher — consult a tax professional for full planning.

Self-Employment Tax Calculator

A self-employment tax calculator is a free online tool that estimates your 2026 SE tax plus federal income tax on your Schedule C profit. It shows your total SE tax, the deductible half, combined federal burden, and after-tax income. Free, no sign-up required.

Schedule C Profit & Deductions

Net Profit (Schedule C)?Enter your net profit (schedule c).

Itemized Deductions

Filing Status

End of inputs

Your 2026 Self-Employment Tax Estimate

SE Tax

$11,303.64

Social Security + Medicare

Social Security Tax

$9,161.12

12.4% of net earnings

Medicare Tax

$2,142.52

2.9% of net earnings

Federal Income Tax

$9,477.05

After deductible half

Total Tax Burden

$20,780.69

SE + income tax

After-Tax Income

$59,219.31

Profit minus all taxes

Effective Rate

25.98%

Total burden ÷ profit

Deductible Half

$5,651.82

Tax deduction

Schedule C profit: $80,000.00. Net SE earnings: $73,880.00 (92.35% of profit). Filing status: Single. SE tax: $11,303.64 ($9,161.12 SS + $2,142.52 Medicare). Deductible half: $5,651.82. Federal income tax: $9,477.05. Total burden: $20,780.69 (25.98% effective). After-tax income: $59,219.31.

Where Your Profit Goes

Key Insights

The deductible half of your SE tax is $5,651.82 — a significant above-the-line deduction that lowers your adjusted gross income (AGI). This deduction is automatic on Form 1040 Schedule SE and reduces income tax regardless of whether you itemize. At your marginal rate, it saves roughly $1,412.96 in income tax (estimated at a 25% bracket).

Your self-employment tax of $11,303.64 is 14.13% of your $80,000.00 profit — a moderate SE-tax burden. The effective SE rate is below the headline 15.3% because only 92.35% of profit is taxable for SE purposes, and the Social Security portion caps at the $176,100.00 wage base.

Your combined federal tax burden is $20,780.69 (25.98% of profit) — SE tax $11,303.64 plus income tax $9,477.05. This moderate combined rate is typical for self-employed filers in the middle brackets. The deductible half of SE tax ($5,651.82) already reduces your income tax automatically.

Your $80,000.00 net profit is in a common self-employment range. SE tax of $11,303.64 is unavoidable, but a solo 401(k) or SEP-IRA can meaningfully cut income tax. Set aside roughly 25%–30% of profit for federal taxes to avoid surprises at filing time.

Your net SE earnings of $73,880.00 are well below the 2026 Social Security wage base of $176,100.00. Every dollar of additional profit is subject to the full 15.3% SE tax (12.4% Social Security + 2.9% Medicare) up to the cap. Budget for this rate when pricing your services or projecting quarterly payments.

Guide

How to Use This Calculator

1Enter your Schedule C net profit — this is your business income after deductible business expenses (not after taxes).
2Set your itemized deductions. If your itemized deductions are below the standard deduction, the calculator automatically uses the larger standard deduction for the income-tax portion.
3Choose your filing status (Single or Married Filing Jointly) — this affects your income tax brackets and standard deduction.
4Review the SE Tax metric card, which shows your total self-employment tax (Social Security + Medicare).
5Check the deductible half of SE tax — this is automatically deducted from your profit before income tax is calculated.
6Examine the Total Tax Burden metric — this is your combined SE tax + federal income tax on the remaining profit.
7Review the bar chart to see how your profit splits between Social Security tax, Medicare tax, federal income tax, and after-tax income.
8Use the AI insights to understand your SE tax burden, combined tax rate, deduction benefit, profit tier, and proximity to the Social Security wage base.
9Adjust your profit or deductions to model scenarios — see how contributing to a retirement plan or tracking more expenses could lower your combined tax.

Formula

How It's Calculated

Self-employment tax (2026):

netEarnings = scheduleCProfit × 0.9235
socialSecurityTax = 0.124 × min(netEarnings, $176,100)
medicareTax       = 0.029 × netEarnings
totalSETax        = socialSecurityTax + medicareTax
deductibleHalf    = totalSETax / 2

Federal income tax on remaining profit:
  grossIncomeForIncomeTax = scheduleCProfit − deductibleHalf
  deductions = max(standardDeduction, itemizedDeductions)
    standardDeduction (2026): $8,350 single, $16,700 married jointly
  taxableIncome = max(0, grossIncomeForIncomeTax − deductions)
  incomeTax = Σ (min(taxableIncome, b.max) − b.min) × b.rate  per bracket

Combined totals:
  totalTaxBurden = totalSETax + incomeTax
  effectiveRate  = totalTaxBurden / scheduleCProfit
  afterTaxIncome = scheduleCProfit − totalTaxBurden

2026 single income brackets (projected, post-TCJA sunset):
  10%   $0 – $12,100
  15%   $12,100 – $48,550
  25%   $48,550 – $117,250
  28%   $117,250 – $224,500
  33%   $224,500 – $515,800
  35%   $515,800 – $618,700
  39.6% $618,700+

Example: $80,000 Schedule C profit, single, $14,600 itemized deductions.
  netEarnings = $80,000 × 0.9235 = $73,880
  socialSecurityTax = 12.4% × $73,880 = $9,161.12
  medicareTax        = 2.9%  × $73,880 = $2,142.52
  totalSETax         = $11,303.64
  deductibleHalf     = $5,651.82
  taxableIncome = $80,000 − $5,651.82 − max($8,350, $14,600) = $59,748.18
  incomeTax     = 10%×$12,100 + 15%×$36,450 + 25%×$11,198.18 ≈ $9,477.05
  totalTaxBurden ≈ $20,780.69
  effectiveRate  ≈ 25.98%
  afterTaxIncome ≈ $59,219.31

Glossary

Key Terms

FAQ

Frequently Asked Questions

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