What is the self-employment tax rate for 2026?

15.3% total: 12.4% for Social Security (capped at $184,500 in 2026) plus 2.9% for Medicare with no cap, plus an additional 0.9% Medicare tax above $200,000 for single filers.

Do I owe self-employment tax on all of my net profit?

It applies to 92.35% of your net self-employment earnings, not the full amount — a built-in adjustment in the calculation.

Can I deduct my self-employment tax?

You can deduct half of it as an above-the-line adjustment on your federal income tax return, which reduces your income tax but not the self-employment tax itself.

Taxes

Self-Employment Tax Explained for Freelancers

15.3% of your net earnings goes here — separate from, and in addition to, federal income tax.

What is self-employment tax?

It's how self-employed people pay into Social Security and Medicare — the same programs a traditional employer and employee split through payroll withholding. Since there's no employer to cover half, freelancers pay both sides themselves through self-employment tax.

Social Security and Medicare breakdown

Self-employment tax is 15.3% total, split into two parts:

12.4% for Social Security, applied only up to the annual wage base — $184,500 in 2026. Income above that isn't subject to the Social Security portion.
2.9% for Medicare, with no income cap at all.
An additional 0.9% Medicare tax applies on earnings above $200,000 (single filers).

How to calculate it on Schedule SE

The calculation isn't applied to your full net profit — it's applied to 92.35% of it first, a built-in adjustment that roughly accounts for the fact that an employer's share wouldn't itself be taxed as employee income. Multiply your net self-employment earnings by 0.9235, then apply the 15.3% (or the tiered breakdown above if you're near the wage base or the $200,000 threshold).

The employer portion deduction

Here's a detail that softens the blow: you get to deduct half of your self-employment tax as an above-the-line adjustment on your federal income tax return — effectively treating that half the way an employer's contribution would have been treated, tax-free to you. This doesn't reduce your self-employment tax itself, only your federal income tax.

See your exact self-employment tax, not an estimate

The calculator applies the real 2026 formula to your numbers.

Go to the free calculator

How to reduce your self-employment tax

The most direct way is an S-Corp election once your income is high enough to justify it (commonly cited around $50,000–$80,000 in net profit) — it lets you split income into a reasonable salary (subject to the tax) and distributions (not subject to it). Below that income level, the added payroll and filing costs usually outweigh the savings. Retirement contributions through a SEP-IRA or Solo 401(k) don't reduce self-employment tax either, but they do reduce your income tax, which is a separate lever worth pulling.

Common misconceptions

"I don't owe self-employment tax if I made under a certain amount." The threshold is low — generally $400 in net self-employment earnings triggers the requirement.
"An LLC lowers my self-employment tax." Not by itself — a single-member LLC is taxed identically to a sole proprietorship unless you elect S-Corp status.
"Self-employment tax replaces income tax." No — it's in addition to federal (and possibly state) income tax, not instead of it.