What is self-employment tax?

Self-employment tax is a 15.3% tax that covers Social Security (12.4%) and Medicare (2.9%) taxes. Unlike W-2 employees who split this with their employer, self-employed individuals pay both portions.

How much should I set aside for self-employment tax?

A good rule of thumb is to set aside 25-30% of your net self-employment income for taxes. This covers both self-employment tax (15.3%) and estimated income tax.

Can I deduct half of my self-employment tax?

Yes, you deduct half of your self-employment tax (the employer-equivalent 7.65 of the 15.3 points), not counting Additional Medicare Tax, when calculating your adjusted gross income. This reduces your income tax liability.

When are quarterly estimated taxes due?

Quarterly estimated taxes are due April 15, June 15, September 15, and January 15 of the following year. Missing deadlines can result in underpayment penalties.

How much self-employment tax do I pay?

Self-employment tax is 15.3% of 92.35% of your net self-employment income. For $100K net income, that's $14,130 in SE tax. Half of this is deductible from your income tax.

Can I write off my home office?

Yes, if you use part of your home exclusively and regularly for business (daycare and inventory-storage exceptions aside). You can deduct a portion of rent/mortgage, utilities, and insurance based on the square footage used for business.

What can freelancers deduct from taxes?

Freelancers can deduct business expenses including home office, equipment, software, professional services, health insurance, retirement contributions (SEP-IRA, Solo 401k), mileage, and continuing education.

Self-Employment Tax Calculator

Know exactly what you owe before it's due

Working for yourself is liberating — until that first tax bill shows up. Unlike W-2 employees, you're responsible for both the employer AND employee portions of Social Security and Medicare. This calculator breaks down exactly what you'll owe, so you can set aside the right amount and avoid that April panic.

Updated August 24, 2026Reviewed for 2026 tax yearIRS-sourcedReviewed by Adam Khale

How much self-employment tax will I owe in 2026?

Self-employment tax is 15.3% on net self-employment earnings once they reach $400 or more. This consists of 12.4% for Social Security (on the first $184,500 for 2026) and 2.9% for Medicare (no income cap). You can deduct 50% of self-employment tax as an above-the-line deduction.

Total SE tax rate: 15.3% (12.4% Social Security + 2.9% Medicare)
Social Security wage base: $184,500 in 2026 (SSA Oct 24, 2025)
Additional Medicare tax: 0.9% on SE income over $200,000 (single)
Deductible portion: 50% of regular SE tax reduces your AGI

Source:IRS Publication 334

The phrase 'self-employment tax' sounds like a small extra. It isn't. It's 15.3% on top of regular income tax — and it's the first bill nobody warns new freelancers about. The good news: half of it is deductible above the line, and a clean Schedule C with legitimate business deductions usually shaves real dollars off the base.

Real-world scenario

A freelance developer, $84,000 net Schedule C income

A freelance developer reports $84,000 of net Schedule C income. SE tax base: $84,000 × 0.9235 = $77,574. SE tax: $77,574 × 15.3% = $11,869. Half of that ($5,935) is deducted above the line on Form 1040, which lowers regular federal income tax by roughly $1,425 at a 24% marginal rate. Net SE 'extra cost' after the deduction: about $10,444 — still substantial, but smaller than the sticker shock.

The part most people miss

If you're earning under the Social Security wage base ($184,500 for 2026), every dollar of net SE income gets hit with the full 15.3%. But the moment your W-2 wages plus SE income cross that base, the 12.4% Social Security portion stops on the excess — only the 2.9% Medicare portion (plus 0.9% Additional Medicare above $200K single / $250K MFJ) continues. Knowing this changes how high earners structure W-2 vs 1099 income.

Meet Marcus

"When Marcus went freelance, his first 'surprise' was an $8,000 tax bill in April. He didn't know about quarterly payments or that he'd owe both the employer AND employee portions of Social Security and Medicare. Now he sets aside 30% of every payment — no more April panic."

What Did You Earn This Year?

Enter your profit after business expenses — that's what gets taxed.

Tax Year

Current return

Uses 2025 brackets and $176,100 Social Security wage base. SE tax rate (15.3%) is statutory and unchanged.

Net Self-Employment Income

Filing Status

Your W-2 Wages, Box 1 (Optional)

My W-2 box 3 or box 5 differs from box 1 (for example, I made pre-tax 401(k) deferrals)

SE Tax Components: Social Security (12.4%) + Medicare (2.9%) = 15.3%. Only 92.35% of your net SE income is subject to SE tax, and Social Security is capped at $176,100 for 2025.

Tax Breakdown

Net SE Income$0

× 92.35% (taxable portion)$0

Social Security (12.4%)$0.00

Medicare (2.9%)$0.00

Total SE Tax$0.00

Deductible (50% of regular SE)-$0

Income tax on your self-employment income$0

The extra federal income tax the SE income adds on top of the W-2 wages on your return (box 1). Assumes your W-2 withholding already covers the tax on your wages; if it doesn't, add the shortfall (Form 1040-ES). The 20% qualified business income deduction is not included, so this can run high for many sole proprietors.

Total Estimated Tax$0

Effective SE Tax Rate

0.00%

Estimated Quarterly Payment

Pay each quarter

2025 Quarterly Payment Due Dates

Q1 2025

Jan 1 - Mar 31

Due: April 15, 2025

Q2 2025

Apr 1 - May 31

Due: June 16, 2025

Q3 2025

Jun 1 - Aug 31

Due: September 15, 2025

Q4 2025

Sep 1 - Dec 31

Due: January 15, 2026

This calculator provides estimates based on 2026 tax rates (Rev. Proc. 2025-32) and assumes the standard deduction. The 50% SE tax deduction only applies to regular SE tax (not Additional Medicare Tax). Consult a tax professional for complex situations including multiple businesses, S-Corp elections, or significant non-SE income.