If you're a freelancer, consultant, or gig worker in the US, self-employment tax is often the biggest surprise on your first tax return. Use our free Self-Employment Tax Calculator to see SE tax, income tax, and quarterly payment amounts — and compare with the W-2 vs 1099 Calculator if you're weighing employment vs contracting.
What Is Self-Employment Tax?
Self-employment tax covers both halves of FICA — 12.4% Social Security and 2.9% Medicare — for a combined 15.3% on 92.35% of your net self-employment income. W-2 employees only pay half; as a 1099 worker, you pay the full amount.
The 92.35% Rule
You don't pay SE tax on 100% of net income because the IRS treats the employer-equivalent portion as already accounted for. Multiplying net SE income by 92.35% gives your SE tax base before applying the 15.3% rate.
The SE Tax Deduction — Worked Example
On $60,000 net SE income (single, no W-2 wages): SE tax ≈ $8,478. You deduct 50% ($4,239) from AGI, reducing federal income tax by roughly $500–$800 depending on your bracket. The calculator shows this savings explicitly.
QBI Deduction (Section 199A)
Eligible self-employed individuals may deduct up to 20% of qualified business income from taxable income. Phase-outs apply for specified service businesses at higher income levels. Toggle QBI in the calculator to see the impact.
Quarterly Estimated Taxes & Safe Harbor
Pay estimated tax in four installments or face underpayment penalties. Safe harbor: pay 100% of prior year tax or 90% of current year tax. Our calculator divides total estimated tax by four for a simplified quarterly amount.
The $400 Threshold
Net SE earnings below $400/year are exempt from self-employment tax. Above $400, SE tax applies to the full net amount (not just the excess over $400).
Additional Medicare Tax
An extra 0.9% Medicare tax applies to combined wages and SE income over $200,000 (single) or $250,000 (MFJ). The calculator includes this when applicable.
Frequently Asked Questions
What is the self-employment tax rate for 2026?
The self-employment tax rate is 15.3% — composed of 12.4% for Social Security and 2.9% for Medicare. This is calculated on 92.35% of your net self-employment income. The Social Security portion only applies to the first $184,500 of combined wages and SE income in 2026.
Can I deduct self-employment tax from my income?
Yes — you can deduct 50% of your self-employment tax as an above-the-line deduction on your Form 1040, reducing your adjusted gross income. This represents the employer-equivalent portion of FICA, mirroring the deduction employers receive.
When are quarterly estimated tax payments due in 2026?
For 2026, quarterly estimated tax payments are due: April 15 (Q1), June 17 (Q2), September 16 (Q3), and January 15, 2027 (Q4). If you expect to owe more than $1,000 in federal taxes for the year, you are generally required to make these payments.
What is the $400 threshold for self-employment tax?
If your net earnings from self-employment are less than $400 for the tax year, you do not owe self-employment tax (though you may still owe income tax on the earnings). Once net SE income reaches $400, SE tax applies to the full amount.