How to Calculate Self-Employment Tax in 2026

To calculate self-employment tax, multiply your net SE income by 92.3% to get the taxable base, then apply the 15.3% SE tax rate (12% Social Security + 2.9% Medicare). For example, on $80,000 of net self-employment income, your SE tax base is $73,880, and total SE tax is $11,303.64. You can then deduct half of that amount on your Form 1040.

What is self-employment tax?

Self-employment tax is the Social Security and Medicare tax that self-employed individuals pay on their net earnings. W-2 employees split FICA with their employer: each side pays 6.2% for Social Security and 1.5% for Medicare. As a self-employed worker, you pay both halves, for a combined rate of 15.3%.

SE tax is reported on Schedule SE and filed with your Form 1040. It is separate from income tax. Even if your income is low enough that you owe zero income tax, you still owe SE tax on net self-employment earnings of $400 or more.

Step-by-step calculation

The self-employment tax calculation follows these steps:

1. Start with net self-employment income. This is your gross self-employment revenue minus business expenses, as calculated on Schedule C (or Schedule F for farming). If you have multiple self-employment activities, combine the net results.
2. Multiply by 92.3%. This adjustment mirrors the fact that W-2 employees do not pay FICA on the employer's portion of FICA taxes. Your result is the SE tax base.
3. Calculate the Social Security portion. Multiply the SE tax base by12%. This portion applies only up to $184,500 of the SE tax base in 2026. Any amount above that cap is not subject to the Social Security portion.
4. Calculate the Medicare portion. Multiply the full SE tax base by2.9%. There is no cap on the Medicare portion.
5. Add both portions together. The sum is your total self-employment tax.
6. Deduct half. You can deduct 50% of your SE tax as an above-the-line deduction on Schedule 1 of Form 1040. This reduces your adjusted gross income (AGI), which in turn reduces your income tax.

Worked example: $80,000 net income

Suppose you are a single freelancer with $80,000 of net self-employment income in 2026 and no other income.

The $5,651.82 deduction reduces your AGI before calculating income tax. Your AGI would be $80,000 minus $5,651.82, which is approximately $74,348. From there, subtract the standard deduction of $16,100 to arrive at your taxable income for the income tax calculation.

The Social Security wage base cap

For 2026, the Social Security wage base is $184,500. Only the first $184,500 of your SE tax base is subject to the 12% Social Security portion. If your SE tax base exceeds that cap, the excess is subject only to the 2.9% Medicare portion.

If you also have W-2 wages, your W-2 wages count toward the $184,500 cap first. Only the remaining cap space applies to your SE income. For example, if you earn $100,000 in W-2 wages, only $84,500 of your SE tax base would be subject to the Social Security portion.

Additional Medicare Tax

If your total self-employment earnings exceed $200,000 (single filers), you owe an additional 0.9% Medicare tax on the excess. This additional tax is calculated on Form 8959 and applies only to the employee-equivalent share (not doubled like the base Medicare rate). The threshold varies by filing status.

For a single self-employed individual with $250,000 of SE earnings, the additional Medicare tax would apply to $50,000 of earnings above the threshold.

Deducting half of SE tax

The 50% SE tax deduction is one of the most valuable deductions available to self-employed workers. It reduces your AGI, which can affect eligibility for other tax benefits that depend on AGI or modified AGI.

This deduction is taken on Schedule 1 (line 15) and flows to Form 1040. You claim it whether you take the standard deduction or itemize. It does not reduce your SE tax itself; it only reduces the income subject to income tax.

Use the self-employment tax calculator to run your own numbers. For definitions and background, see our self-employment tax glossary entry.