Enter your self-employment income to see your full tax breakdown.
How Self-Employment Tax Works in 2026
Self-employment tax for 2026 is 15.3% of 92.35% of your net profit, which works out to 14.13% of profit: 12.4% for Social Security on up to $184,500 and 2.9% for Medicare with no cap. On $80,000 of profit that is $11,304, and half of it is deductible. Enter your profit, any W-2 wages and your filing status above for the full picture.
Self-employment tax covers Social Security and Medicare for freelancers, contractors, and sole proprietors. Unlike employees who split FICA 50/50 with employers, self-employed individuals pay both halves: but get two compensating benefits.
SE Tax by Net Profit in 2026
No W-2 wages. The deductible half lowers income tax, not the SE tax itself.
| Net profit | SE tax base (92.35%) | Social Security | Medicare | SE tax | Deductible half |
|---|---|---|---|---|---|
| $20,000 | $18,470 | $2,290 | $536 | $2,826 | $1,413 |
| $40,000 | $36,940 | $4,581 | $1,071 | $5,652 | $2,826 |
| $60,000 | $55,410 | $6,871 | $1,607 | $8,478 | $4,239 |
| $80,000 | $73,880 | $9,161 | $2,143 | $11,304 | $5,652 |
| $100,000 | $92,350 | $11,451 | $2,678 | $14,130 | $7,065 |
| $150,000 | $138,525 | $17,177 | $4,017 | $21,194 | $10,597 |
| $200,000 | $184,700 | $22,878 | $5,356 | $28,234 | $14,117 |
| $250,000 | $230,875 | $22,878 | $6,695 | $29,573 | $14,787 |
Social Security stops at $22,878, which is 12.4% of the $184,500 wage base. A single filer at $250,000 of profit also owes $278 of Additional Medicare Tax (0.9% of SE earnings above $200,000), reported on Form 8959 and not part of the deductible half.
Full Federal Picture: $80,000 of Profit
Single filer, no other income, no retirement or health insurance deductions.
- SE tax: $80,000 × 92.35% × 15.3% = $11,304.
- Adjusted gross income: $80,000 minus half the SE tax ($5,652) = $74,348.
- Minus the $16,100 standard deduction = $58,248.
- Minus the 20% qualified business income deduction ($11,650) = taxable income of $46,599.
- Federal income tax on that: $5,344.
Total federal tax is $16,647, or 20.8% of profit, so each quarterly estimated payment is about $4,162. Without the QBI deduction the income tax would be $7,527, which is why leaving it out overstates what a sole proprietor owes.
When You Also Have a W-2 Job
Wages and SE earnings share one Social Security wage base. Take a single filer with $150,000 of W-2 wages and $60,000 of side profit. The SE tax base is $55,410, but only $34,500 of wage base is left, so Social Security is 12.4% of $34,500 = $4,278 instead of $6,871. Medicare still applies in full ($1,607), so SE tax is $5,885. On top of that, $5,410 of SE earnings sits above the $200,000 Additional Medicare threshold after wages, adding $49.
If your wages alone reach $184,500, SE tax drops to the 2.9% Medicare part only. Your employer's Social Security withholding already covered the maximum.
The 20% QBI Deduction for Sole Proprietors
The qualified business income deduction, made permanent by the One Big Beautiful Bill Act, lets you deduct up to 20% of qualified business income: net profit minus the deductible half of SE tax, self-employed health insurance and retirement contributions for yourself. It is capped at 20% of taxable income before the deduction and is taken whether or not you itemize.
- Below $201,750 of taxable income ($403,500 married filing jointly) in 2026, most sole proprietors get the full 20%.
- Above that, limits phase in over the next $75,000 ($150,000 joint). Specified service businesses such as consulting, law or health lose the deduction, and other businesses become limited by W-2 wages paid and property owned.
- The calculator above applies the full phase-out above the threshold, the cautious case. Your real deduction may be larger.
- QBI never lowers self-employment tax. It only reduces income tax.
Running a side business next to a job? The side hustle tax calculator breaks out expenses and shows what to set aside from each payment.