Self-Employment Tax Calculator (2026)

Self-employment tax is the Social Security and Medicare tax that business owners pay on their own profit. For 2026 it's 15.3% of net earnings, which are 92.35% of net profit: 12.4% for Social Security up to $184,500, plus 2.9% for Medicare on everything. A contractor with $85,000 of profit owes about $12,010.

How is self-employment tax calculated?

Multiply net profit by 92.35% to get net earnings from self-employment, then apply 12.4% (Social Security) to net earnings up to the $184,500 wage base and 2.9% (Medicare) to all of it. The 92.35% step mirrors the employer half of payroll tax that a W-2 employee never sees on their pay.

SE tax = min(N, B − W) × 12.4% + N × 2.9%, where N = profit × 92.35%

1. 1

   Start with net profit.

   Use Schedule C line 31 profit (revenue minus business expenses). If you have more than one business, add the profits together.

2. 2

   Multiply by 92.35%.

   This gives net earnings from self-employment. If it's under $400, you generally owe no SE tax.

3. 3

   Apply the Social Security rate.

   Multiply net earnings, up to $184,500 minus any W-2 wages, by 12.4%.

4. 4

   Apply the Medicare rate.

   Multiply all net earnings by 2.9%. There's no cap on this part.

5. 5

   Deduct half.

   Add the two parts for your SE tax, then deduct half of it on Schedule 1 when figuring adjusted gross income.

How much self-employment tax will I pay?

The effective rate falls above roughly $199,783 of profit, because the 12.4% Social Security part stops at the wage base. The Medicare part never stops, and the Additional Medicare Tax adds 0.9% on top at higher incomes.

Self-employment tax vs. income tax

They're two separate taxes on the same profit. Income tax depends on your bracket, deductions and credits. Self-employment tax is a flat payroll-style tax on nearly every dollar of profit, and the standard deduction doesn't reduce it. That's why a contractor in a low income-tax bracket can still owe a large bill. The quarterly estimated tax calculator adds both together.

How can a contractor lower self-employment tax?

• Claim every legitimate business expense. SE tax is figured on profit, so a deductible truck, tool or software expense lowers it. See the contractor tax deductions list.
• Track business miles. The mileage deduction reduces Schedule C profit, which reduces SE tax too.
• Write off equipment in year one. A Section 179 deduction on Schedule C reduces SE income in the year you take it.
• Consider an S corporation once profit is steady. S corporations must pay a shareholder-employee reasonable compensation (subject to payroll tax) before taking distributions, and distributions aren't subject to SE tax. It adds payroll, a separate return and cost, so run it past a CPA. See S corp vs. LLC for contractors.

Common mistakes

• Applying 15.3% to all profit. The rate applies to 92.35% of profit, and the Social Security part stops at the wage base.
• Forgetting W-2 wages. If you or your side job already paid Social Security tax on wages, you have less room under the wage base.
• Thinking the deductible half lowers SE tax. It lowers income tax only.
• Paying it once a year. SE tax is part of your quarterly estimated payments. Waiting for April can trigger an underpayment penalty.