Self-employment tax explained: 2026 rates, wage base and examples

When you work for an employer, Social Security and Medicare are split in half. You pay 7.65% out of your paycheck and your employer pays 7.65%. When you work for yourself, you pay both halves. That is self-employment tax.

The rules for 2026

Rule	2026 figure	Source
Total rate	15.3%	IRS Topic 554
Social Security part	12.4%	IRS Topic 554
Medicare part	2.9%	IRS Topic 554
Share of profit that is taxed	92.35%	IRS Topic 554
Social Security wage base	$184,500	SSA
Minimum to owe SE tax	$400 of net earnings	IRS Topic 554
Additional Medicare Tax	0.9% above $200,000 single, $250,000 joint, $125,000 married filing separately	IRS Topic 560

Three details matter:

• 92.35%, not 100%. You only pay on 92.35% of your net profit. This mirrors the fact that employees do not pay FICA on the employer's half.
• Social Security stops at the wage base. In 2026, only the first $184,500 of SE earnings pays the 12.4%. Medicare has no cap. If you also have a W-2 job, your wages use up part of that $184,500 first.
• You deduct half. Half of your SE tax is deducted when figuring your adjusted gross income. It lowers income tax, not the SE tax itself.

How to calculate it, step by step

1. Start with net profit from Schedule C (revenue minus business expenses).
2. Multiply by 92.35%.
3. If the result is under $400, stop. You owe no SE tax.
4. Social Security: 12.4% of the result, up to $184,500.
5. Medicare: 2.9% of the whole result.
6. Add them. Half of that total is your deduction.

These are the same steps as the SE tax worksheet in the 2026 Form 1040-ES.

Example: $60,000 net profit

• $60,000 × 92.35% = $55,410
• Social Security: $55,410 × 12.4% = $6,870.84
• Medicare: $55,410 × 2.9% = $1,606.89
• SE tax: $8,477.73
• Deduction: $4,238.87

That is 14.13% of profit, not 15.3%, because of the 92.35% rule.

SE tax at different profit levels

Single filer, no W-2 wages:

Net profit	Taxed amount (92.35%)	Social Security	Medicare	Additional Medicare	Total	Share of profit
$30,000	$27,705	$3,435.42	$803.45	$0	$4,238.87	14.13%
$60,000	$55,410	$6,870.84	$1,606.89	$0	$8,477.73	14.13%
$100,000	$92,350	$11,451.40	$2,678.15	$0	$14,129.55	14.13%
$150,000	$138,525	$17,177.10	$4,017.23	$0	$21,194.33	14.13%
$200,000	$184,700	$22,878.00	$5,356.30	$0	$28,234.30	14.12%
$250,000	$230,875	$22,878.00	$6,695.38	$277.88	$29,851.26	11.94%
$300,000	$277,050	$22,878.00	$8,034.45	$693.45	$31,605.90	10.54%

From about $199,783 of profit, the taxed amount passes $184,500 and Social Security stops growing. The share of profit falls after that, even with the 0.9% Additional Medicare Tax on top. Note that the IRS reports Additional Medicare Tax on a separate form (Form 8959), and it is not part of the half you deduct.

The wage base keeps rising

The Social Security wage base was $176,100 in 2025 and is $184,500 in 2026. SSA has already announced $192,300 for 2027. If your profit is near the cap, your SE tax will rise next year even if your income stays flat.

Paying it during the year

SE tax is not withheld. You pay it with income tax through quarterly estimated payments. For tax year 2026, the IRS lists these due dates:

Payment	Due date
1st	April 15, 2026
2nd	June 15, 2026
3rd	September 15, 2026
4th	January 15, 2027

Put it into your rate

SE tax is one of the biggest reasons a freelance rate has to be much higher than a salary divided by 2,080. The freelance rate calculator adds it for you, including the wage base and the Additional Medicare Tax. For the full method, read how to calculate your freelance hourly rate.