How to use this self-employment tax calculator
- Enter your self-employment income for the year: 1099-NEC and 1099-K payments, cash and any other business receipts.
- Enter your business expenses. What’s left is your net profit, the amount self-employment tax is based on.
- Pick your filing status and, for an estimate of state income tax, your state.
- Add W-2 wages under “W-2 job and business type” if you also have a job, since wages use up part of the Social Security wage base.
- Read the set-aside amount and the quarterly payment to plan your estimated taxes.
What is self-employment tax?
Self-employment tax is Social Security and Medicare tax for people who work for themselves. An employee pays 7.65% of wages and the employer pays another 7.65%. When you’re self-employed you pay both halves, 15.3% in all, on Schedule SE with your Form 1040. It applies to sole proprietors, independent contractors, freelancers, gig workers and members of partnerships that carry on a trade or business.
You owe it when your net earnings from self-employment are $400 or more. It is separate from income tax: you can owe self-employment tax even in a year when your income is too low to owe any income tax.
How self-employment tax is calculated
Schedule SE first reduces your net profit to 92.35% of it. That mirrors the employer’s half of the tax, which an employee never sees as wages. The 12.4% Social Security part then applies up to the wage base, and the 2.9% Medicare part applies to everything:
S = 0.124 × min(0.9235 × P, B − W) + 0.029 × 0.9235 × P
- S
- self-employment tax
- P
- net profit from self-employment (income minus business expenses)
- B
- Social Security wage base ($184,500 for 2026)
- W
- W-2 wages already subject to Social Security
Worked example
A freelancer bills $75,000 and spends $15,000 on the business, for a profit of $60,000. Net earnings are $60,000 × 92.35% = $55,410. Social Security is 12.4% × $55,410 = $6,870.84 and Medicare is 2.9% × $55,410 = $1,606.89, so self-employment tax is $8,477.73.
For income tax, half of that ($4,238.87) is deducted from income, then the $16,100 standard deduction, leaving $39,661. The qualified business income deduction takes off another $7,932, so $31,729 is taxed and the federal income tax is $3,559. In total: $12,037, or 20.1% of the profit.
Self-employment tax at different profits
For 2026, with no W-2 wages. The Social Security part stops growing once net earnings reach $184,500, at a profit of about $199,783, which is why the rate falls at higher profits.
| Net profit | Net earnings (92.35%) | Self-employment tax | Deductible half | Share of profit |
|---|---|---|---|---|
| $10,000 | $9,235 | $1,413 | $706 | 14.1% |
| $25,000 | $23,088 | $3,532 | $1,766 | 14.1% |
| $40,000 | $36,940 | $5,652 | $2,826 | 14.1% |
| $60,000 | $55,410 | $8,478 | $4,239 | 14.1% |
| $80,000 | $73,880 | $11,304 | $5,652 | 14.1% |
| $100,000 | $92,350 | $14,130 | $7,065 | 14.1% |
| $150,000 | $138,525 | $21,194 | $10,597 | 14.1% |
| $200,000 | $184,700 | $28,234 | $14,117 | 14.1% |
| $250,000 | $230,875 | $29,573 | $14,787 | 11.8% |
How much to set aside for taxes on 1099 income
Self-employment tax is only part of the bill. The table adds federal income tax, after the standard deduction, the deduction for half of self-employment tax and the qualified business income deduction, for someone whose only income is the business. State income tax is extra.
| Net profit | SE tax | Income tax (single) | Total (single) | Set aside (single) | Set aside (married, joint) |
|---|---|---|---|---|---|
| $20,000 | $2,826 | $199 | $3,025 | 15.1% | 14.1% |
| $40,000 | $5,652 | $1,775 | $7,427 | 18.6% | 15.1% |
| $60,000 | $8,478 | $3,559 | $12,037 | 20.1% | 17.3% |
| $80,000 | $11,304 | $5,344 | $16,647 | 20.8% | 18.6% |
| $100,000 | $14,130 | $8,235 | $22,365 | 22.4% | 19.5% |
| $150,000 | $21,194 | $16,413 | $37,608 | 25.1% | 20.7% |
| $200,000 | $28,234 | $25,196 | $53,431 | 26.7% | 22.4% |
If you also have a job or your spouse earns income, your profit is taxed in higher brackets, so set aside more. Enter the wages in the calculator to see the difference.
Self-employment tax when you also have a W-2 job
The $184,500 Social Security wage base covers your wages and your net earnings together, and wages count first. With $150,000 of wages, only $34,500 of a side business’s net earnings is left for the 12.4% part, so self-employment tax on a $60,000 profit is $5,885 instead of $8,478. Once wages reach the wage base, only the 2.9% Medicare part is due. Medicare has no cap, and the 0.9% Additional Medicare Tax applies when wages and self-employment income together pass $200,000 ($250,000 married filing jointly, $125,000 married filing separately).
A job can also cover the tax on your side income: you can ask your employer to withhold more with a new Form W-4 instead of making estimated payments. For the tax on the wages themselves, use the paycheck calculator.
Deductions that lower the tax
- Business expenses lower both taxes, because they reduce the profit that self-employment tax and income tax start from.
- Half of self-employment tax is deducted in figuring adjusted gross income. It lowers income tax only, not self-employment tax.
- The qualified business income (QBI) deduction takes up to 20% of your business profit, after the half of self-employment tax, off taxable income, limited to 20% of taxable income. It lowers income tax only. For 2026 it starts to phase out when taxable income is over $201,750 ($403,500 married filing jointly) for a business with no employees or property, and for specified service businesses such as health, law, accounting and consulting. Starting in 2026, the deduction is at least $400 if you have at least $1,000 of qualified business income from a business you actively run.
- Health insurance and retirement contributions for yourself are deducted on Schedule 1, not on Schedule C, so they lower income tax but not self-employment tax.
At a $250,000 profit, a single filer’s taxable income is $219,113, inside the phase-out range, so the QBI deduction drops to $36,152, or $27,782 for a specified service business. The calculator applies these rules for a business with no W-2 employees and no qualified property.
Quarterly estimated tax payments for 2026
No employer withholds tax from self-employment income, so the IRS expects you to pay during the year. You generally must make estimated payments if you expect to owe at least $1,000 after withholding and credits. The 2026 due dates are:
- First payment: April 15, 2026
- Second payment: June 15, 2026
- Third payment: September 15, 2026
- Fourth payment: January 15, 2027
You don’t have to make the January payment if you file your 2026 return by February 1, 2027 and pay the balance with it. To avoid the underpayment penalty, pay at least 90% of this year’s tax or 100% of last year’s, whichever is smaller; if last year’s adjusted gross income was over $150,000 ($75,000 married filing separately), use 110% of last year’s tax. In the example above, four payments of $3,009 cover the year.
What this calculator doesn’t include
It uses the standard deduction and leaves out credits such as the earned income tax credit and the child tax credit, the self-employed health insurance and retirement plan deductions, farm income, the optional methods on Schedule SE and local taxes. The QBI deduction assumes one business without W-2 employees or qualified property. For the full picture of your federal and state income tax, try the income tax calculator; for 2026 rates and limits, see the 2026 Social Security and FICA tax page.
Frequently asked questions
How much is self-employment tax on $60,000?
$8,477.73 for 2026. Net earnings are 92.35% of the $60,000 profit, $55,410, and the 15.3% rate applies to that: $6,870.84 for Social Security and $1,606.89 for Medicare. Half of it, $4,238.87, is deductible for income tax. Federal income tax comes on top: about $3,559 for a single filer with no other income.
What is the self-employment tax rate for 2026?
15.3%: 12.4% for Social Security on net earnings up to the $184,500 wage base (shared with any W-2 wages) and 2.9% for Medicare with no limit. It applies to 92.35% of your net profit, so the effective rate on profit is about 14.13%. High earners also pay the 0.9% Additional Medicare Tax.
How much should I set aside for taxes on 1099 income?
For federal taxes, a single filer with no other income would set aside about 15% of a $20,000 profit, 20% of $60,000 and 27% of $200,000, counting self-employment tax and income tax after the QBI deduction. Add your state’s income tax, and more if you also have a job or a spouse with income.
Do I pay self-employment tax if I also have a W-2 job?
Yes, on your self-employment profit. The Social Security part stops once your wages and net earnings together reach $184,500, so wages from a job leave less room for it. With $150,000 of wages, a $60,000 profit owes $5,885 of self-employment tax instead of $8,478. The 2.9% Medicare part has no cap.
Is self-employment tax deductible?
Half of it is. You deduct the employer-equivalent half of self-employment tax when you figure your adjusted gross income, which lowers your income tax. The IRS notes that this deduction doesn’t change your net earnings or the self-employment tax itself. On a $60,000 profit the deduction is $4,239.
Do I have to pay estimated taxes?
Generally yes, if you expect to owe at least $1,000 for the year after withholding and credits. The 2026 payments are due April 15, 2026, June 15, 2026, September 15, 2026, January 15, 2027. You usually avoid a penalty by paying at least 90% of this year’s tax or 100% of last year’s tax (110% if last year’s AGI was over $150,000), whichever is smaller.
Do I owe self-employment tax on less than $400?
No. You owe self-employment tax and file Schedule SE only when net earnings from self-employment are $400 or more, which takes a net profit of about $434. The profit still counts as income for income tax.