Estimates only, not tax advice. This calculator applies the federal self-employment tax rules to the numbers and rates you enter. Your real bill depends on your whole return, your deductions and credits, and your state. Check current figures with the IRS and SSA, or ask a tax professional. Figures were last updated in November 2026.
How to use the calculator
- Enter what clients paid you and your business expenses, or switch to Net profit if you already know it (Schedule C, line 31).
- Pick your filing status and tax year. The Social Security wage base for that year fills in automatically.
- If you also have a W-2 job, enter your wages. They can shrink the Social Security part of the bill and count toward the Additional Medicare Tax threshold.
- Enter an effective federal income tax rate and a state rate. These are the only guesses; everything else follows the Schedule SE method.
Your inputs stay in this browser, and the page address updates as you type, so you can bookmark a scenario or send it to your accountant.
What self-employment tax is
Self-employment tax is Social Security and Medicare tax for people who work for themselves. Employees split these taxes with their employer, 7.65% each. When you are your own employer you pay both halves: 12.4% for Social Security plus 2.9% for Medicare, 15.3% in total. It is separate from income tax, so you can owe it in a year when you owe no income tax at all. You figure it on Schedule SE and pay it with your Form 1040 and your quarterly estimated payments.
| Figure | 2025 | 2026 |
|---|---|---|
| Self-employment tax rate | 15.3% | 15.3% |
| Social Security wage base | $176,100 | $184,500 |
| Maximum Social Security part of SE tax | $21,836.40 | $22,878.00 |
| Additional Medicare threshold: single or head of household | $200,000 | $200,000 |
| Additional Medicare threshold: married filing jointly | $250,000 | $250,000 |
| Additional Medicare threshold: married filing separately | $125,000 | $125,000 |
| Minimum net earnings before SE tax is due | $400 | $400 |
How self-employment tax is calculated
Net earnings = net profit × 92.35%
Social Security = smaller of (net earnings) or (wage base − W-2 Social Security wages) × 12.4%
Medicare = net earnings × 2.9%
Additional Medicare = net earnings above (threshold − Medicare wages) × 0.9%
Deductible half = (Social Security + Medicare) ÷ 2
Take a single freelance designer in 2026 who bills $85,000 and spends $13,000 on software, equipment and a coworking desk. That leaves a net profit of $72,000, with no other job.
- Net earnings: $72,000 × 92.35% = $66,492.00
- Social Security: $66,492.00 × 12.4% = $8,245.01, well under the $184,500 wage base
- Medicare: $66,492.00 × 2.9% = $1,928.27
- Additional Medicare Tax: $0, because $66,492 is under the $200,000 threshold
- Self-employment tax: $10,173.28, about 14.1% of net profit
- Deductible half: $5,086.64
Now give the same designer a $150,000 W-2 salary. The wages use up most of the wage base, leaving $34,500, so Social Security tax drops to $4,278.00. Medicare stays at $1,928.27. The wages also use $150,000 of the $200,000 Additional Medicare threshold, so the $16,492 of net earnings above the remaining $50,000 owes 0.9%, or $148.43. That is the Schedule SE and Form 8959 method, and the calculator shows each of these lines in its working.
Why only 92.35% of profit is taxed
An employee's share of Social Security and Medicare comes out of their wages, but the employer's matching 7.65% is never counted as the employee's income. To put you on the same footing, Schedule SE taxes only 92.35% of your profit (100% minus 7.65%). You don't claim it separately; it is built into the form.
The deduction for half of self-employment tax
You can deduct the employer-equivalent half of your self-employment tax as an adjustment to income on Schedule 1. It lowers your adjusted gross income, and so your income tax, whether or not you itemize. It does not lower the self-employment tax itself, and the 0.9% Additional Medicare Tax is not part of it. In the first example, income tax is figured on about $66,913 instead of $72,000.
Quarterly estimated taxes and safe harbors
Nobody withholds tax from client payments, so the IRS expects you to pay as you earn. You generally need to make estimated payments if you expect to owe $1,000 or more when you file, after withholding and credits. The four federal due dates are April 15, June 15, September 15 and January 15 of the next year, moved to the next business day when one lands on a weekend or legal holiday. The periods are uneven: the June payment covers two months of income and the January payment covers four.
Pay too little or too late and the IRS adds an underpayment penalty, which works like interest on the shortfall. You generally avoid it if you owe less than $1,000 when you file, or if your withholding and on-time payments cover at least:
- 90% of this year's total tax, or
- 100% of last year's total tax, if last year was a full 12-month year and you filed a return. This rises to 110% if last year's adjusted gross income was over $150,000 ($75,000 if married filing separately).
The prior-year rule is the easy one when income is unpredictable: take last year's total tax, including self-employment tax, divide by four and pay that each quarter. If you also have a W-2 job, raising your paycheck withholding can cover freelance tax instead, because withholding counts as paid evenly through the year. If most of your income arrives late in the year, the annualized income method on Form 2210 may reduce a penalty. These rules can change, so check IRS Publication 505 and Form 1040-ES for the year you are paying, and see whether your state wants its own estimated payments.
How much to set aside each month
Use the percentage this calculator gives you rather than a rule of thumb. The designer above needs about 23.8% of every dollar billed, or 28.1% of profit, with a 10% federal and 5% state estimate. A simple system:
- Open a separate savings account just for taxes.
- Each time a client pays, move your "% of gross income" figure into it the same day.
- Pay each quarterly estimate from that account and leave the rest as a cushion until you file.
- Rerun the numbers every quarter. A big contract can push your rate up; a slow quarter can bring it down.
If you prefer a fixed transfer, the monthly figure is your total set-aside divided by 12.
Record-keeping tips and common mistakes
- Keep business money in a separate account so your profit is easy to prove.
- Save receipts and invoices, with a note on the business purpose of anything that isn't obvious. Keep a mileage log if you deduct driving.
- Report all income, whether or not a client sends you a 1099.
- Log every estimated payment with its date, amount and confirmation number. You need the total when you file.
- The IRS generally says to keep records for at least three years after you file, and longer in some situations.
- Don't apply 15.3% to gross income. The tax applies to 92.35% of profit, after expenses.
- Don't use your top bracket as your average rate if freelancing is your only income. Your effective rate is lower. If you also have a salary, though, your freelance profit is taxed at your top rate.
- Don't spend the January payment. The fourth payment for a year is due in January of the next year.
Frequently asked questions
What is the self-employment tax rate for 2026?
The rate is 15.3%: 12.4% for Social Security and 2.9% for Medicare. It applies to 92.35% of your net profit, so it works out to about 14.1% of profit. The Social Security part stops once your Social Security wages and net earnings reach the 2026 wage base of $184,500, and an extra 0.9% Additional Medicare Tax applies above $200,000 for single filers ($250,000 married filing jointly).
Do I owe self-employment tax if I made less than $400?
Generally no. If your net earnings from self-employment (92.35% of net profit) are under $400, you don't owe self-employment tax for the year. You may still owe income tax on that profit and may still need to file a return, depending on your total income.
Is self-employment tax the same as income tax?
No. Self-employment tax pays for Social Security and Medicare and is a flat percentage of your net earnings. Income tax is separate, uses brackets, and depends on your filing status, deductions and credits. Freelancers owe both, which is why this calculator adds an income tax estimate on top.
How much should I set aside for taxes as a 1099 contractor?
Enough to cover self-employment tax plus federal and state income tax on your profit. Run your numbers above and use the percent of gross figure: move that share of every client payment into a separate account. Recheck it each quarter, because the percentage changes as your income changes.
When are quarterly estimated taxes due for 2026?
For the 2026 tax year the four federal payments are due April 15, June 15 and September 15, 2026, and January 15, 2027. A due date that falls on a weekend or legal holiday moves to the next business day. States set their own schedules, so check your state tax agency too.
What happens if I miss a quarterly estimated payment?
The IRS may charge an underpayment penalty, which works like interest on the amount you paid late for the time it was late. Paying as soon as you can limits it. You generally avoid the penalty if you owe less than $1,000 when you file, or if you paid at least 90% of this year's tax or 100% of last year's tax (110% if last year's AGI was over $150,000) on time.
Does a W-2 job lower my self-employment tax?
It can lower the Social Security part. Your W-2 Social Security wages use up the annual wage base first, so if wages plus self-employment earnings pass it, less of your freelance income is taxed at 12.4%. The 2.9% Medicare tax still applies to all of it, and wages count toward the Additional Medicare Tax threshold.