How self-employment tax works
When you work for someone else, you pay 7.65% of your wages in FICA tax (Social Security + Medicare) and your employer matches another 7.65%. When you are self-employed, you are both the employee and the employer — so you pay the full 15.3% yourself. That is the SE tax.
The IRS lets you reduce the impact in two ways. First, only 92.35% of your net business profit is subject to SE tax (the so-called net earnings factor). Second, you can deduct half of the SE tax you pay as an adjustment to income on Schedule 1 — that lowers your federal income tax bill.
The 12.4% / 2.9% / 0.9% breakdown
- Social Security (12.4%) applies up to the SSA wage base — $184,500 in 2026, $176,100 in 2025, $168,600 in 2024. Net earnings above that threshold are exempt from the SS portion.
- Medicare (2.9%) applies to every dollar of net earnings — there is no wage cap.
- Additional Medicare (0.9%) kicks in above $200,000 single / $250,000 married filing jointly. These thresholds are not adjusted for inflation; combined wages and net SE income count toward the threshold.
Who pays SE tax
- Freelancers and independent contractors filing 1099-NEC income.
- Sole proprietors with Schedule C profit of $400 or more.
- Members of a partnership receiving guaranteed payments.
- Gig workers (rideshare, delivery, freelance platforms).
- Etsy / Shopify / eBay sellers reaching reportable thresholds.
When to pay quarterly
If you expect to owe $1,000 or more after withholding, the IRS expects four payments throughout the year — roughly April 15, June 15, September 15, and January 15 of the next year. Missing them triggers an underpayment penalty even if you settle up at filing.
How to use this calculator
- Enter your gross 1099 income. Total all the money you received as a freelancer, gig worker or sole proprietor before expenses. Include cash, checks, Venmo, Stripe, Etsy payouts and 1099-NEC / 1099-K amounts.
- Subtract business expenses. Anything ordinary and necessary for your business: software, equipment, mileage, home-office portion, contractor payments, supplies, and so on.
- Pick your filing status. Single, married filing jointly, married filing separately, or head of household. This sets your federal tax brackets and the Additional Medicare threshold.
- Add other (W-2) income. If you also have a regular job, include those wages so the calculator stacks both incomes correctly for the marginal bracket.
- Read the breakdown. You will see total federal tax, the quarterly payment, and a line-by-line breakdown of SE tax, half-SE deduction, QBI, and federal income tax.
Frequently asked questions
What is the self-employment tax rate?
The combined SE tax rate is 15.3%: 12.4% Social Security on net earnings up to the annual wage base ($184,500 in 2026, $176,100 in 2025) plus 2.9% Medicare on all net earnings. High earners owe an additional 0.9% Medicare above $200,000 (single) or $250,000 (married filing jointly).
Why is the rate 15.3% instead of 7.65%?
Employees split FICA with their employer (7.65% each). Self-employed people are both — so they pay the full 15.3%. The IRS softens this with two adjustments: the 92.35% net-earnings factor and the half-SE deduction taken on Schedule 1.
Do I owe SE tax if I earn less than $400 from self-employment?
No. The IRS sets a $400 threshold of net self-employment earnings below which you generally do not owe SE tax. You may still owe regular income tax on that amount.
When are quarterly estimated taxes due?
For tax year 2026: April 15, 2026 (Q1), June 15, 2026 (Q2), September 15, 2026 (Q3), and January 15, 2027 (Q4). For tax year 2025: April 15 / June 16 / September 15 / January 15, 2026. Dates shift one business day when they fall on weekends or federal holidays.
Does this calculator include state income tax?
No. Each state has its own brackets and many (Florida, Texas, Washington, Tennessee, etc.) have no income tax at all. Add your state liability separately when planning quarterly payments.
What is the QBI deduction?
The Qualified Business Income deduction (Section 199A) lets most self-employed people deduct up to 20% of their qualified business income from taxable income. The deduction has phase-outs above the Section 199A income thresholds for specified service trades; this calculator applies a flat 20% as a planning estimate.
Are these numbers official IRS figures?
Yes for all three supported tax years (2024, 2025 and 2026) — sourced from public IRS Revenue Procedures (most recently Rev. Proc. 2025-32 in IRB 2025-45). The 2025 standard deduction values reflect the OBBBA amendment to § 63(c)(7). Wage bases come from the SSA Annual COLA fact sheets.
Is this advice or just an estimate?
Estimate only. This tool exists for planning and education; it is not a return preparer and does not substitute for personalized advice from a licensed CPA, EA, or tax attorney.