How Much Is Self-Employment Tax?
The 15.3% tax most new freelancers don't see coming, explained clearly.
By the Easy Guides Editorial Team
Want to see your self-employment tax alongside your federal income tax? The 1099 Tax Calculator gives your full 2026 estimate, SE tax, income tax, the QBI deduction, and quarterly payments, in seconds.
Open the 1099 Tax Calculator →What is self-employment tax?
Self-employment tax is the Social Security and Medicare tax paid by people who work for themselves. When you're a W-2 employee, your employer pays half (7.65%) and withholds the other half from your paycheck. When you earn 1099 income, you pay both halves, the full 15.3%.
The breakdown: 12.4% for Social Security (on the first $184,500 of net SE income in 2026) and 2.9% for Medicare (no income cap). High earners also pay a 0.9% Additional Medicare Tax on SE income over $200,000 (single) or $250,000 (married filing jointly).
Where this comes from: set by statute, not adjusted annually · IRC §3101(b)(2) (wages); IRC §1401(b)(2) (self-employment income).
How SE tax is calculated
SE tax is calculated on 92.35% of your net self-employment income, not the full 100%. This adjustment approximates the employer share that a W-2 employee's employer would otherwise pay.
$70,000 × 92.35% = $64,645 (taxable SE income)
$64,645 × 15.3% = $9,891 self-employment tax
The deduction that softens the blow
You can deduct half of your SE tax from your gross income, an above-the-line deduction you don't need to itemize to claim. In the example above: $9,891 ÷ 2 = $4,946 deduction, reducing your income tax bill accordingly.
Three ways to legally reduce SE tax
1. Deduct all legitimate business expenses. SE tax is calculated on net profit. Every dollar of deductible business expense reduces your SE tax base. Use our deductions checklist to find every write-off available to you.
2. Contribute to a retirement account. SEP-IRA, Solo 401(k), and SIMPLE IRA contributions reduce your income tax, but not SE tax directly. Still extremely valuable for the income tax savings and long-term wealth building.
3. Elect S-corporation status (higher income only). If your net SE income consistently exceeds $60,000, $80,000, electing S-corp status for your LLC can meaningfully reduce SE tax. You pay yourself a reasonable salary (subject to payroll taxes) and take remaining profit as distributions (not subject to SE tax). The setup and compliance costs make this worth exploring only at higher income levels, consult a CPA first.
SE tax and quarterly payments
Self-employment tax must be included in your quarterly estimated tax payments, many first-timers forget this and get a larger-than-expected bill at filing. Our 1099 tax estimator accounts for SE tax automatically.
Self-employment tax by state
The 15.3% self-employment tax is federal and the same everywhere, but your state income tax on that 1099 income is not. See the full 2026 breakdown and take-home estimate for your state:
Common questions
How much is self-employment tax?
It is 15.3% of 92.35% of your net profit: 12.4% for Social Security up to the $184,500 wage base in 2026, plus 2.9% for Medicare with no cap. Very high earners add 0.9% more Medicare.
Where this comes from: SSA, 2026 COLA fact sheet (wage base set under 42 U.S.C. §430), checked 2026-08-01 · Social Security Act §230 (42 U.S.C. §430); incorporated by IRC §3121(a)(1) for wages and IRC §1402(b) for self-employment income.
Why do I pay 15.3% when employees pay 7.65%?
Employees split FICA with an employer. Working for yourself, you are both halves. The IRS softens it by taxing only 92.35% of profit and letting you deduct half of the tax on your return.
How can I reduce self-employment tax?
Track every legitimate business expense, since the tax is figured on net profit rather than gross income. Past roughly $80,000 of steady profit, an S corp election can help, though it adds payroll and filing costs.