FINANCIAL · SELF-EMPLOYMENT TAX
Self-Employment Tax Calculator
Calculate your self-employment (SE) tax and above-the-line deduction for freelancers, sole proprietors, and independent contractors. Uses 2026 IRS FICA rates.
Social Security portion capped at the 2026 wage base ($184,500). Use Schedule SE when filing. Federal only — state taxes not included.
About This Calculator
Enter your net self-employment income to estimate your federal SE tax (Social Security + Medicare) and the above-the-line deduction you can claim on your income tax return. Uses 2026 IRS rates and the current Social Security wage base.
How It Works
Self-employed individuals pay both the employee and employer portions of Social Security and Medicare taxes (FICA). The IRS reduces the taxable base by 7.65% (the employer-equivalent share), so SE tax is calculated on 92.35% of your net SE income at a combined 15.3% rate (12.4% Social Security up to the annual wage base + 2.9% Medicare on all earnings). You can then deduct half of the SE tax from your gross income, reducing your income tax burden.
The Formula
SE Tax = (Net SE Income × 0.9235) × 0.153 Deduction = SE Tax × 0.5
- Net SE Income
- Business revenue minus deductible business expenses
- 0.9235
- SE adjustment factor — reduces base by the employer-equivalent 7.65%
- 0.153
- Combined SE tax rate: 12.4% (Social Security) + 2.9% (Medicare)
Frequently Asked Questions
- Who pays self-employment tax?
- Anyone with net self-employment earnings of $400 or more from freelancing, consulting, gig work, or running a sole proprietorship or single-member LLC must pay SE tax. SE tax covers your Social Security and Medicare contributions — the same amounts that would be split between you and an employer if you were a W-2 employee.
- What is the above-the-line deduction?
- You can deduct half of your SE tax from your gross income (not your SE income base) on Schedule 1 of your Form 1040. This deduction represents the employer-equivalent portion of SE tax that a regular employer would pay and deduct as a business expense. It reduces your adjusted gross income (AGI) and therefore your income tax, though it does not reduce the SE tax itself.
- Why is SE tax calculated on 92.35% of net income?
- The 92.35% factor accounts for the employer-equivalent half of FICA that would normally be deductible for a traditional employer. Since you are both employee and employer, the IRS effectively reduces the base before applying the 15.3% rate — which gives the same result as if an employer were paying half and deducting it as a business expense.
- What is the Social Security wage base for 2026?
- The 2026 Social Security wage base is $184,500. The 12.4% Social Security portion of SE tax applies only up to this amount; earnings above it are exempt from Social Security SE tax but still subject to the 2.9% Medicare portion (and the additional 0.9% Medicare tax if applicable).
- Are state self-employment taxes included?
- No. This calculator computes federal SE tax only. Most states do not have a separate SE tax, but your net SE income is subject to state income tax in states that have one. Consult a tax professional for state-specific guidance.