Self-Employment Tax Calculator guide
Estimate 2026 Schedule SE tax on 1099 or business profit, including the Social Security wage cap, W-2 wages from a day job, and the 0.9% Additional Medicare Tax.
What self-employment tax is (2026 figures)
Self-employment tax is Social Security and Medicare for people who work for themselves. An employee splits 15.3 percent with their employer: 7.65 percent each. When you are self-employed you are both, so you pay the full 15.3 percent: 12.4 percent Social Security plus 2.9 percent Medicare. It applies if you have $400 or more of net earnings from self-employment, and it is owed on top of income tax.
For tax year 2026, the Social Security part applies only to the first $184,500 of combined wages and self-employment earnings (up from $176,100 in 2025, per the Social Security Administration). Medicare has no cap. Above $200,000 (single or head of household), $250,000 (married filing jointly), or $125,000 (married filing separately), an extra 0.9 percent Additional Medicare Tax applies. Those thresholds are set in law and are not adjusted for inflation.
The formula, step by step
1. Net profit: gross 1099 or business income minus business expenses (Schedule C, line 31).
2. Net earnings = net profit × 92.35 percent. The 7.65 percent reduction mirrors the employer's half of FICA, which an employer would not pay tax on.
3. Social Security = 12.4 percent × the smaller of net earnings or ($184,500 − your W-2 wages). Wages from a job already used up part of the cap.
4. Medicare = 2.9 percent × all net earnings.
5. SE tax = Social Security + Medicare. Half of it is deductible when you figure income tax, as an adjustment to income on Schedule 1, whether or not you itemize.
6. Additional Medicare (Form 8959) = 0.9 percent × net earnings above your threshold, reduced by any W-2 wages. It is not part of the deductible half.
Worked examples
Freelancer, $85,000 profit, single, no W-2 job: net earnings = $85,000 × 0.9235 = $78,497.50. Social Security = $9,733.69. Medicare = $2,276.43. SE tax = $12,010.12, a 14.13 percent effective rate on profit. The deductible half is $6,005.06. For quarterly estimates, that is $3,002.53 a quarter before any income tax.
Consultant, $250,000 profit, single: net earnings are $230,875. Social Security stops at the $184,500 cap: $22,878. Medicare on everything: $6,695.38. SE tax = $29,573.38. Additional Medicare on the $30,875 above $200,000 adds $277.88. The effective rate drops to 11.94 percent because of the cap.
Side hustle, $60,000 profit plus a $150,000 W-2 job: the job already used $150,000 of the cap, so only $34,500 is left. Social Security = $4,278. Medicare = $1,606.89. SE tax = $5,884.89, plus $48.69 of Additional Medicare because wages cut the $200,000 threshold to $50,000. Most calculators ignore W-2 wages and would overstate this by about $2,600.
How to lower self-employment tax legally
Track every business expense. Each $1,000 of deductible expense cuts SE tax by about $141 and income tax on top of that. The home office, business mileage (IRS standard mileage rate), software, equipment, and health insurance premiums (income tax only) are the common ones people miss.
Consider an S corporation election once profit is steady and well above about $60,000 to $80,000. You pay yourself a reasonable salary subject to payroll tax and take the rest as distributions that avoid the 15.3 percent. Payroll, a separate return, and state fees cost $1,500 to $3,000 a year, so run the numbers with a CPA.
Retirement contributions (a solo 401(k) or SEP IRA) reduce income tax but not SE tax, because SE tax is calculated before them. People mix this up often.
Common mistakes
Applying 15.3 percent to gross revenue. It applies to net profit × 92.35 percent.
Forgetting the deductible half. It lowers adjusted gross income on your Form 1040.
Skipping estimated payments. If you expect to owe $1,000 or more, the IRS expects quarterly payments (April 15, June 15, September 15, January 15) and charges an underpayment penalty if you miss them.
Using last year's wage base. It changes every year; this calculator is labeled for tax year 2026 and is updated each January.
How we calculate: sources
Frequently asked questions
What is the self-employment tax rate for 2026?
15.3 percent: 12.4 percent Social Security on up to $184,500 of combined wages and net SE earnings, plus 2.9 percent Medicare with no cap. It applies to net profit × 92.35 percent.
Why is self-employment tax calculated on 92.35 percent of profit?
The 7.65 percent reduction mirrors the employer half of FICA, which employees never pay tax on. It puts self-employed people on similar footing.
Do W-2 wages affect self-employment tax?
Yes. Wages count toward the $184,500 Social Security cap first, so only the remaining room is taxed at 12.4 percent. Wages also reduce the Additional Medicare threshold.
Is self-employment tax deductible?
Half of it is deductible as an adjustment to income on Schedule 1, which lowers income tax. It does not lower the SE tax itself. Additional Medicare Tax is not part of the deduction.
When does the 0.9 percent Additional Medicare Tax apply?
On earnings above $200,000 for single and head of household filers, $250,000 married filing jointly, or $125,000 married filing separately. These thresholds are not indexed for inflation.
Do I owe self-employment tax on side hustle income?
Yes, if your net earnings from self-employment are $400 or more for the year, even if you also have a full-time job.
Does this include income tax?
No. It calculates self-employment tax only. Federal and state income tax are owed on top.
Are my numbers saved or uploaded?
Everything runs in your browser. Nothing you enter is uploaded to a server or stored by us.
Do I pay self-employment tax on under $400?
No. If net earnings from self-employment are under $400 for the year, no SE tax is due, though the income may still be subject to income tax.