How the Self-Employment Tax & 1099 Tax calculator works
Self-employment tax
SE tax = Net profit × 92.35% × (12.4% Social Security + 2.9% Medicare)
- Social Security part
- stops at $184,500 of combined wages and self-employment earnings in 2026
- Additional Medicare tax
- 0.9% on earnings above $200,000 single, $250,000 joint
Deduction
Half of the SE tax is deducted from income for income tax purposes
Worked example
A single freelancer has $60,000 of profit after business expenses and no other job. Self-employment tax applies to 92.35% of it, $55,410, so the self-employment tax is $8,478.
Half of that, $4,239, is deducted from income, and the 20% qualified business income deduction lowers taxable income further. Income tax on the profit comes to about $3,559, for a total federal tax of $12,037, or roughly $3,009 a quarter in estimated payments.
1099 tax: why freelancers pay more payroll tax
Employees split Social Security and Medicare with their employer: each pays 7.65%. When you work for yourself you are both, so you pay both halves, 15.3%, softened by the 92.35% rule and the deduction for half of the tax. It is the main reason freelance income feels more heavily taxed than a paycheck.
Self-employment tax rates for 2026 and 2027
| Part | Rate | Applies to |
|---|---|---|
| Social Security | 12.4% | Net earnings up to $184,500 in 2026 ($192,300 in 2027) |
| Medicare | 2.9% | All net earnings |
| Additional Medicare tax | 0.9% | Above $200,000 ($250,000 joint) |
Net earnings are 92.35% of your business profit. Wages from a job count toward the Social Security limit first. Half of the Social Security and Medicare part is deducted from your income. Source: IRS and SSA.
Ways to lower the tax legally
- Track every business expense: each dollar of expense lowers both self-employment and income tax.
- Retirement plans: a SEP IRA or solo 401(k) lowers income tax, though not self-employment tax.
- Health insurance: self-employed people can usually deduct premiums for themselves and their family.
Related calculators
Turn the total into payments with the quarterly tax calculator, which applies the safe harbor rules. To compare with a salaried job’s take-home pay, use the paycheck calculator, and for the business’s full profit picture, the profit calculator.
Assumptions and limits
- Net income is business income minus business expenses, as on Schedule C or your partnership Schedule K-1.
- Income tax uses the standard deduction and, where it applies, the 20% qualified business income deduction.
- Health insurance and retirement contributions that reduce your income can be entered as lower net income for a quick estimate.
- State income and business taxes are not included.
Frequently asked questions
How much is self-employment tax?
15.3% of 92.35% of your net self-employment income, about 14.1% of profit. On $60,000 of profit it is about $8,478. Above the Social Security wage base ($184,500 in 2026), only the 2.9% Medicare part continues.
Is self-employment tax the same in every state?
Yes. Self-employment tax is a federal tax, so the rate is the same everywhere: 15.3% of 92.35% of your net earnings, with the 12.4% Social Security part stopping at $184,500 of combined earnings in 2026. Your state's income tax, if it has one, comes on top and is figured separately.
How much is self-employment tax on $60,000?
About $8,478 for 2026: 15.3% of $55,410, which is 92.35% of $60,000. You can deduct half of it, $4,239, when you figure your income tax. Income tax on the profit is extra.
Why is it 92.35% of my income?
Employees don't pay Social Security and Medicare on their employer's half of those taxes. Multiplying by 92.35% (100% minus half of 15.3%) gives the self-employed the same treatment.
Can I deduct self-employment tax?
Half of it, as an adjustment to income on your Form 1040. That lowers your income tax but not the self-employment tax itself.
Do I have to pay self-employment tax if I also have a W-2 job?
Yes, on net earnings of $400 or more. Social Security already paid through your job counts toward the yearly wage base, so high earners may owe only the Medicare part on side income.
How much should I set aside for taxes as a freelancer?
Many freelancers set aside 25% to 30% of profit for federal taxes, more in states with income tax. The calculator's total shows your figure and the quarterly amount.
Sources and method
- Self-employment tax (Social Security and Medicare taxes) · Internal Revenue Service
- Contribution and Benefit Base · Social Security Administration
- IRS releases tax inflation adjustments for tax year 2026, including amendments from the One, Big, Beautiful Bill · Internal Revenue Service
Formulas and figures checked against these sources on November 12, 2026. The calculator runs entirely in your browser; nothing you type is sent to us or stored. Results are estimates for education, not financial, tax or legal advice, and MonyPulse is not a lender, tax preparer or investment adviser. Found an error? Tell us. See how we build and test our calculators and our editorial standards.