Self-Employment Tax Calculator

Self-employment (SE) tax is how self-employed people pay into Social Security and Medicare. It is the SECA equivalent of the FICA taxes a W2 employer would split with you. The combined rate is 15.3%: 12.4% goes to Social Security (Old-Age, Survivors, and Disability Insurance) and 2.9% goes to Medicare (Hospital Insurance). You owe SE tax once your net self-employment earnings reach $400 in a tax year, and you report it on Schedule SE attached to your Form 1040.

Because a W2 employee never pays Social Security or Medicare on the employer's half of the payroll tax. To put the self-employed person on roughly the same footing, the IRS lets you multiply your net earnings by 0.9235 (which is 1 minus 0.0765, the employer's half of FICA) before applying the 15.3% SE rate. The 7.65% you back out upfront is the employer-equivalent portion that you also get to deduct against income tax later. It is a structural deduction baked into the formula, not an election.

For 2026 the Social Security wage base is $184,500. Only earnings up to this ceiling are subject to the 12.4% Social Security portion of SE tax. The 2.9% Medicare portion has no wage base at all and applies to every dollar of self-employment earnings. If you also draw a W2 paycheck where Social Security has already been withheld, the wages already taxed reduce the SE wage base available to your self-employment income, so you do not double-pay above $184,500.

The 0.9% Additional Medicare Tax (IRC Section 1401(b)(2)) applies to combined wages and self-employment earnings above filing-status thresholds: $200,000 for single and head of household filers, $250,000 for married filing jointly, and $125,000 for married filing separately. These thresholds were set by the Affordable Care Act in 2013 and are not indexed for inflation, so more taxpayers cross them every year. The surtax stacks on top of the standard 2.9% Medicare rate, so high-earning self-employed people effectively pay 3.8% Medicare on the dollars above the threshold.

You take the deduction on Schedule 1, Line 15 of Form 1040, and it flows up to your adjusted gross income (AGI). It is an above-the-line deduction, so you get it whether or not you itemize. The amount is exactly half of the SE tax you computed on Schedule SE, mirroring the employer-side FICA a W2 worker never sees. This deduction reduces your federal income tax, but it does not reduce the SE tax itself: you still owe the full 15.3% on the 92.35% base, you just get to deduct half of that against income tax. Net effect: the SE tax stings less than the headline number once income tax is in the picture.