Self-employment tax covers Social Security and Medicare taxes for individuals who work for themselves. In 2026, the self-employment tax rate is 15.3% of net earnings from self-employment.
This rate breaks down as 12.4% for Social Security (on earnings up to $168,600) and 2.9% for Medicare (on all earnings). High earners face an additional 0.9% Medicare tax above $200,000 (single) or $250,000 (married).
Self-employment tax applies to 92.35% of your net business income. To calculate: 1. Calculate gross revenue minus business expenses = net profit 2. Multiply net profit by 0.9235 = net earnings subject to SE tax 3. Multiply result by 15.3% = self-employment tax
Example: You earn $80,000 after expenses. Taxable earnings = $80,000 × 0.9235 = $73,880. SE tax = $73,880 × 0.153 = $11,304.
Self-employed individuals must pay quarterly estimated taxes using IRS Form 1040-ES. For 2026, the due dates are: - Q1: April 15, 2026 - Q2: June 15, 2026 - Q3: September 15, 2026 - Q4: January 15, 2027
Underpayment penalties apply if you pay less than 90% of current year tax or 100% of prior year tax (110% if AGI > $150,000).
Self-employed taxpayers can deduct: - One-half of self-employment tax (above-the-line deduction) - Health insurance premiums - Home office expenses (simplified or actual cost methods) - Business mileage (67 cents per mile for 2026) - Retirement contributions to SEP-IRA or Solo 401(k)
These deductions reduce your taxable income and may lower your marginal tax rate.
Input your self-employment income and estimated deductions into our Tax Calculator to see your total federal tax liability, including self-employment tax, income tax, and potential deductions.