Self-employment tax in 2026,
the 15.3% math, walked through
SE tax is 15.3% of 92.35% of your net self-employment earnings: 12.4% Social Security (capped at $184,500) plus 2.9% Medicare (no cap) plus 0.9% additional Medicare above thresholds. Half is deductible above the line. Below: the math, the table, and how to calculate quarterly estimated payments.
The headline rate
SE tax base: 92.35% of net self-employment earnings.
Social Security portion: 12.4% on the SE tax base, capped at $184,500 (combined with W-2 wages).
Medicare portion: 2.9% on the SE tax base, no cap, plus 0.9% additional above $200K (single) / $250K (MFJ).
Half deductible: Half of the SE tax computed above is deductible from AGI on Form 1040 Schedule 1.
That is on TOP of your regular federal income tax (10-37% brackets), state income tax (where applicable), and quarterly estimated tax requirements.
By net SE income
SE tax math at common income levels
"Net SE earnings" is gross business income minus business expenses. The SE tax base is 92.35% of that. Half of SE tax is deductible above the line, reducing your AGI for federal income tax purposes (but NOT reducing the SE tax itself).
| Net SE income | SE tax base (92.35%) | SS 12.4% | Medicare 2.9% + add'l | Total SE tax | Half deductible | Effective rate |
|---|---|---|---|---|---|---|
| $25,000 | $23,088 | $2,863 | $670 | $3,532 | $1,766 | 14.1% |
| $50,000 | $46,175 | $5,726 | $1,339 | $7,065 | $3,532 | 14.1% |
| $75,000 | $69,263 | $8,589 | $2,009 | $10,597 | $5,299 | 14.1% |
| $100,000 | $92,350 | $11,451 | $2,678 | $14,130 | $7,065 | 14.1% |
| $150,000 | $138,525 | $17,177 | $4,017 | $21,194 | $10,597 | 14.1% |
| $200,000 | $184,700 | $22,878 | $5,356 | $28,234 | $14,117 | 14.1% |
| $250,000 | $230,875 | $22,878 | $6,973 | $29,851 | $14,926 | 11.9% |
Effective rate is total SE tax divided by net SE income (less than 15.3% because of the 92.35% base reduction). Federal income tax is computed separately on (net SE income minus half of SE tax) using the standard deduction and brackets.
Walk-through
The full SE tax chain
Step 1: compute net SE earnings
Net SE earnings = gross business income minus deductible business expenses. Reported on Schedule C of Form 1040. Common business expenses: home office (Form 8829, simplified method gives $5/sq ft up to 300 sq ft), vehicle mileage (2026 IRS standard rate is $0.67/mile for business use), supplies and equipment, software subscriptions, professional fees, advertising, contractor payments, internet/phone (business-use percentage), travel, and 50%-deductible business meals. Health insurance premiums are NOT a Schedule C expense but ARE deductible above the line via the self-employed health insurance deduction.
Step 2: multiply by 92.35% to get the SE tax base
Net SE earnings x 0.9235 = SE tax base. The 7.65% reduction approximates the employer share of FICA that a W-2 employer would have paid on equivalent wages. This step happens automatically on Schedule SE Line 4. Without this reduction, self-employed people would effectively pay FICA on the full gross plus FICA on the FICA itself, which would not match W-2 treatment.
Step 3: apply Social Security 12.4% on the cap
Social Security tax of 12.4% (6.2% employee + 6.2% employer) applies to the SE tax base, up to the $184,500 wage base for 2026. The cap combines W-2 wages and SE earnings: if you have $150K of W-2 wages and $50K of SE income, only $34,500 of SE income is subject to the 12.4% Social Security portion (the cap minus the W-2 wages). Schedule SE Section B computes this automatically. Source: SSA Cost-of-Living Adjustment.
Step 4: apply Medicare 2.9% with no cap, plus 0.9% additional above thresholds
Medicare tax of 2.9% (1.45% employee + 1.45% employer) applies to the full SE tax base with no cap. If your combined wages and SE earnings exceed $200,000 (single) or $250,000 (MFJ), an additional 0.9% Medicare tax applies to the portion above the threshold. The additional 0.9% is half of the W-2 employer side (which is paid only by the employee/self-employed, not also by an employer) so the math here matches W-2 exactly. Source: IRS Tax Topic 560.
Step 5: deduct half of the SE tax above the line
Half of the total SE tax computed in Steps 3-4 is deductible on Form 1040 Schedule 1 Line 15 ("Deductible part of self-employment tax"). This deduction reduces your AGI but NOT your SE tax base. So it lowers your federal income tax (the regular 10-37% brackets) and most state income taxes, but does NOT change the SE tax itself. The deduction approximates the employer share of FICA that a W-2 employer would have paid; that employer share is not part of W-2 employees' taxable income, so this deduction restores parity.
Step 6: compute regular federal income tax separately
Net SE earnings minus half of SE tax = your contribution to AGI from self-employment. Add any W-2 wages, investment income, etc. to get total AGI. Subtract the standard or itemised deduction to get taxable income. Apply the federal brackets (10%, 12%, 22%, 24%, 32%, 35%, 37%) progressively. This is your federal income tax, which is SEPARATE from and ADDITIONAL TO the SE tax computed above.
Quarterly estimated taxes
When and how to pay
If you expect to owe $1,000 or more at filing time (typical for any self-employed person earning $5K+ in net SE income), you must pay quarterly estimated tax via IRS Form 1040-ES. Due dates: April 15, June 15, September 15, January 15 of the following year. Each payment should cover SE tax plus federal income tax plus state estimated tax (if applicable) on the income earned during that quarter.
Two safe-harbor rules let you avoid the underpayment penalty: (1) Total annual withholding plus estimated payments equals at least 100% of last year's total tax (110% if your AGI was over $150,000), or (2) total payments equal at least 90% of this year's actual tax. Most self-employed people use the prior-year safe harbor because it is easier to compute: take last year's total federal tax, divide by 4, send that quarterly.
Pay online via IRS Direct Pay (free, draws from your bank account) or via EFTPS (the federal payment system used by most CPAs). State estimated taxes go through each state's revenue department. Underpayment penalty in 2026 is roughly 8% annual interest on the underpaid amount, computed quarterly.
Sources
Where the 2026 SE rules come from
- SE tax computation, Schedule SE. IRS Schedule SE (Form 1040).
- SE tax overview. IRS Self-Employment Tax page.
- Social Security wage base. SSA Cost-of-Living Adjustment.
- Additional Medicare Tax thresholds. IRS Tax Topic 560.
- Quarterly estimated tax. IRS Form 1040-ES.
- Standard mileage rate. IRS Standard Mileage Rates.
Related
Other self-employment and supplemental-wage pages
1099 vs W-2 comparison
Side-by-side at $80K. Why a 1099 needs ~30% more gross to match W-2 take-home.
SS wage base
The cap that limits SE tax growth at high SE incomes.
$50K single (W-2)
Compare to $50K of SE income to see the SE-tax penalty.
401(k) impact (W-2)
Self-employed equivalent: SEP-IRA or Solo 401(k), much higher contribution limits.
Bonus tax math
Different rule for bonuses on W-2; useful to compare to SE quarterly estimates.
Salary calculator
Try a W-2 salary equivalent to compare.