Self-Employment Tax Calculator: What to Set Aside in 2026
Self-employment tax is 15.3% — 12.4% for Social Security and 2.9% for Medicare — charged on 92.35% of your net business profit, which works out to an effective 14.13% of profit. The calculator above applies the 2026 figures (a $184,500 Social Security wage base and the current federal brackets) and answers the question people actually have: what share of each payment isn't yours to spend.
On $60,000 of net profit, a single filer owes $8,477.73 in self-employment tax and about $12,037 in total federal tax — roughly 20.1% of profit, or $3,009 per quarter.
Self-Employment Tax calculators
How it works
Self-employment tax replaces the Social Security and Medicare taxes an employer would otherwise split with you. A W-2 employee pays 7.65% and the employer pays the matching 7.65%. When you work for yourself you are both parties, so you pay the full 15.3%.
The rate is not applied to your full profit. Schedule SE first multiplies net profit by 92.35%, which approximates the employer half an employee would never have been taxed on. That step is why the effective rate on profit is 14.13%, not 15.3% — and why a calculator that skips it overstates your bill by about 8%.
The two halves behave differently above a threshold. The 12.4% Social Security portion stops once your combined wages and net earnings reach the wage base, which is $184,500 for 2026. The 2.9% Medicare portion never stops, and an extra 0.9% Additional Medicare Tax applies above $200,000 ($250,000 for joint filers). If you also hold a W-2 job, those wages consume the Social Security wage base first, so a moonlighter with a high salary can owe far less Social Security tax on their side income than the raw 15.3% suggests.
One deduction comes back to you automatically: half of your self-employment tax is an above-the-line deduction against income tax. The calculator applies it, and it excludes the 0.9% Additional Medicare Tax, which is not deductible.
The set-aside share shown above is deliberately not your household tax bill divided by your profit. If you have a day job, your W-2 withholding already covers the tax on that salary. What you have to fund yourself is the extra tax your self-employment income causes on top of it. That number is often higher than freelancers expect: a side hustle stacks on top of your salary, so it is taxed at your top marginal rate from the first dollar. Someone earning $80,000 at a job plus $20,000 on the side sets aside about 30.5% of the side income, while a full-time freelancer earning $45,000 sets aside about 19.1%.
You pay this as you go, not in April. The IRS expects quarterly estimated payments via Form 1040-ES, and there is a penalty for underpaying even if you settle up in full at filing. Our guide to budgeting with irregular income covers the four due dates and the safe-harbor rules that make the penalty go away.
Frequently asked questions
How much is self-employment tax in 2026?
Self-employment tax is 15.3% of net earnings: 12.4% for Social Security and 2.9% for Medicare. Because it applies to 92.35% of your net profit rather than all of it, the effective rate on profit is 14.13%. The Social Security portion stops at $184,500 of combined wages and net earnings in 2026; the Medicare portion has no ceiling, and an extra 0.9% applies above $200,000 ($250,000 married filing jointly).
How much should I set aside for taxes as a 1099 contractor?
For a full-time freelancer with no other income, 20% to 25% of net profit covers federal self-employment and income tax at typical earnings — $60,000 of profit produces about 20.1%. Set aside more if you have a W-2 job, because side income stacks on top of your salary and is taxed at your highest marginal rate: someone earning $80,000 at a job plus $20,000 freelancing needs about 30.5% of the freelance income. Add your state income tax rate on top of any of these figures.
Why is self-employment tax calculated on 92.35% of my profit?
Because a W-2 employee is never taxed on the employer's half of FICA, and Schedule SE approximates that treatment for the self-employed. Multiplying net profit by 92.35% removes roughly the employer-share equivalent before the 15.3% rate is applied. It is the reason your real rate is 14.13% of profit, and it happens automatically on Schedule SE — you do not have to elect it.
Do I pay self-employment tax if I already pay Social Security at my job?
You still pay the 2.9% Medicare portion, but your W-2 wages consume the Social Security wage base first. If your wages already reach $184,500 in 2026, no Social Security tax applies to your self-employment income at all — only Medicare. Below that, the 12.4% applies just to the remaining room under the wage base. Enter your W-2 wages in the calculator above and the breakdown shows exactly how much Social Security tax is left to pay.
Do I owe self-employment tax if I made less than $2,000?
Self-employment tax applies once your net earnings from self-employment reach $400 for the year — that threshold is unrelated to whether anyone sends you a tax form. For 2026 a payer only has to issue a Form 1099-NEC at $2,000 (raised from $600), and payment apps only issue a 1099-K above $20,000 and 200 transactions. The IRS is explicit that you report gig income "even if the income is... not reported on an information return form." No form does not mean no tax.
Can I lower my self-employment tax?
Only by lowering net profit, since the tax is charged on profit rather than revenue. Every legitimate business deduction — mileage, home office, software, equipment, supplies — cuts self-employment tax and income tax at the same time, which is why a deduction is worth far more to a 1099 earner than to an employee. Retirement contributions to a SEP-IRA or solo 401(k) reduce income tax but not self-employment tax. At higher profit levels, electing S-corporation treatment can reduce the base the 15.3% applies to, at the cost of running payroll.
Sources
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