Self-employment tax, explained (2026)

Self-employment (SE) tax is how the self-employed pay into Social Security and Medicare. It's a flat 15.3% — 12.4% for Social Security plus 2.9% for Medicare — but with two important wrinkles that lower the real cost.

The math, step by step

1. Only 92.35% of your profit counts. The tax applies to your net profit × 0.9235.
2. Social Security caps out. The 12.4% portion only applies up to the 2026 wage base of $184,500. Medicare's 2.9% has no cap.
3. High earners pay a bit more. An extra 0.9% Additional Medicare Tax applies above $200,000 (single) or $250,000 (married filing jointly).
4. You deduct half. One-half of your SE tax comes off your income before income tax is figured — so you're never taxed twice on it.

Worked example

A single freelancer with $60,000 of net profit pays about $8,478 in SE tax ($6,871 Social Security + $1,607 Medicare), and deducts $4,239 of it against income tax. Add federal income tax of about $4,511 and the total federal bill is roughly $12,989. Run your own numbers →

Figures use published 2026 IRS/SSA amounts. See how it works for every source.