Self-Employment Tax in 2026: The 15.3% Explained with a Worked Example
Quick answer
Self-employment tax is 15.3% of net earnings: 12.4% for Social Security on the first $184,500 in 2026, plus 2.9% for Medicare with no cap. It applies to 92.35% of your net profit once net earnings reach $400, and you deduct half of the tax when figuring adjusted gross income.
Self-employment tax figures, 2026 vs 2025
| Item | 2026 | 2025 |
|---|---|---|
| Total self-employment tax rate | 15.3% | 15.3% |
| Social Security portion | 12.4% | 12.4% |
| Social Security wage base | $184,500 | $176,100 |
| Maximum Social Security portion | $22,878 | $21,836.40 |
| Medicare portion | 2.9%, no earnings cap | 2.9%, no earnings cap |
| Additional Medicare Tax | 0.9% above $200,000 single / $250,000 joint / $125,000 separate | Same thresholds (not inflation-indexed) |
| Net earnings multiplier | 92.35% of net profit | 92.35% of net profit |
| Minimum net earnings before SE tax applies | $400 | $400 |
| Church employee income threshold | $108.28 | $108.28 |
| Deductible share of SE tax | Half, as an adjustment to income | Half, as an adjustment to income |
Step by step
- 1
Start with net profit
Take your net profit from Schedule C (or your share of partnership self-employment income). Gross receipts minus allowable business expenses, before any retirement contributions or the SE-tax deduction.
- 2
Multiply by 92.35%
Only 92.35% of net profit is subject to the tax. This adjustment stands in for the employer half of the tax that employees never see in their wages. On Schedule SE this is line 4a.
- 3
Apply the two rates
Charge 12.4% Social Security tax on those net earnings up to $184,500 for 2026, and 2.9% Medicare tax on all of them with no cap. Add 0.9% Additional Medicare Tax on self-employment income above $200,000 (single) or $250,000 (married filing jointly).
- 4
Deduct half against income tax
Half of the self-employment tax comes off your income when figuring adjusted gross income on Form 1040. It reduces income tax, not the SE tax itself, and you get it whether or not you itemise.
Self employment tax is the Social Security and Medicare bill that employees never see in full. An employer quietly pays half of those taxes for its staff; when you work for yourself, both halves land on your Schedule SE. The rate is 15.3%: 12.4% for Social Security, which in 2026 stops at $184,500 of combined wages and net earnings, and 2.9% for Medicare, which never stops. The system hands back two softeners: only 92.35% of net profit is taxed, and half of the resulting tax is deductible against income tax.
A worked example on $60,000 of net profit for 2026. Net earnings are $60,000 x 92.35% = $55,410. The Social Security portion is $55,410 x 12.4% = $6,870.84 and the Medicare portion is $55,410 x 2.9% = $1,606.89, so the total SE tax is about $8,478. Half of that, roughly $4,239, is then deducted when figuring adjusted gross income, which at a 22% marginal rate claws back around $933 of income tax. Note what does not help here: neither retirement contributions nor the QBI deduction reduces SE tax; both act on income tax only.
The same numbers feed the self-employed retirement math, because plan contributions are based on net profit minus half of SE tax. That calculation, and the two-bucket limit it feeds, is worked through in solo 401(k) contribution limits for 2026, the plan-versus-plan decision is covered in SEP IRA vs solo 401(k), and the employee-side figures are in 401(k) contribution limits for 2026. The rest of our US reference shelf is at /us/guides.
This is general information for US readers, not personal tax advice. Figures are the published IRS and Social Security Administration numbers for the 2026 tax year; state taxes and quarterly estimated-payment rules sit on top.
Frequently asked questions
How much do I pay in taxes if self-employed?
Two layers: self-employment tax of 15.3% on 92.35% of net profit (an effective 14.13% of profit below the wage base), plus ordinary federal income tax on the same profit after deductions, plus any state income tax. The SE tax replaces the Social Security and Medicare taxes an employer would normally split with you.
How much tax will I pay on $30,000 a year self-employed?
Self-employment tax alone would be about $4,239: $30,000 x 92.35% = $27,705 of net earnings, taxed at 15.3%. Income tax comes on top and depends on your filing status, other income, and deductions, including the roughly $2,119 deduction for half the SE tax.
Do you have to pay self-employment tax if you make less than $10,000?
Yes, almost certainly. The threshold is $400 of net earnings from self-employment, not $10,000. Below $400 you owe no SE tax; at $10,000 of net profit you would owe about $1,413. The confusion usually comes from income tax thresholds, which are separate and much higher.
How do you avoid or reduce self-employment tax?
Legitimately, three routes: claim every allowable business expense, since SE tax is charged on net profit; note that retirement contributions and the QBI deduction reduce income tax but not SE tax; and at higher profits, an S corporation election can move part of your income out of SE tax, at the cost of payroll and reasonable-salary rules.
Is self-employment tax in addition to income tax?
Yes. Self-employment tax covers Social Security and Medicare only; federal income tax is calculated separately on the same profit. Both are usually paid together through quarterly estimated payments. The one interaction is that half of your SE tax is deductible when working out taxable income.
What if I have a W-2 job and self-employment income?
Your wages use up the Social Security wage base first. If your 2026 wages are already $184,500 or more, you pay no 12.4% portion on your side income, only the 2.9% Medicare portion. Below that, the 12.4% applies to self-employment earnings until wages plus net earnings reach $184,500.
Sources
General information, not financial advice. Tax rules and figures can change; check the current position on irs.gov or ssa.gov before acting.