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Self-Employment Tax Calculator
For freelancers, contractors and side gigs: what you'll owe in self-employment and income tax for 2026, and how much to put aside from every payment.
Your self-employment income
Use your profit: 1099 and other business income minus business expenses (including mileage and home office).
Set aside from each payment
19%
of your profit for federal tax (income + self-employment)
Estimate · 2026 tax law
- Self-employment tax (15.3%)
- $7,064.78
- Income tax after credits
- $2,667.29
- QBI deduction
- $6,074
- Total federal tax
- $9,732.07
- Quarterly estimated payment
- $2,189.72
- Profit after federal tax
- $40,267.93
How this was calculated
SE tax = 92.35% of profit × (12.4% Social Security up to the $184,500 wage base, shared with W-2 wages + 2.9% Medicare). Half of it is deductible. Income tax uses 2026 brackets after the standard deduction and the 20% QBI deduction (only below the threshold). Set-aside % = federal tax not covered by W-2 withholding ÷ profit. State tax isn't included.
Calculation tax.return-2026 v1.0.0.
Quick answer: how much to set aside
When you work for yourself, nobody withholds tax from your pay. You owe two federal taxes on your profit: self-employment tax (Social Security and Medicare, the self-employed version of FICA) and income tax. Here's what that comes to in 2026 for a single filer with no other income, taking the standard deduction:
| Net profit | Self-employment tax | Income tax after credits | Total federal tax | Share of profit to set aside |
|---|---|---|---|---|
| $20,000 | $2,826 | $126 | $2,952 | 14.8% |
| $50,000 | $7,065 | $2,667 | $9,732 | 19.5% |
| $100,000 | $14,130 | $8,235 | $22,365 | 22.4% |
| $150,000 | $21,194 | $16,413 | $37,608 | 25.1% |
Two things stand out. First, self-employment tax is the bigger bill at lower profits: at $20,000, income tax is small (and a $72.88 EITC offsets part of it), but self-employment tax is still $2,826. Second, the set-aside share rises with profit, because income tax is progressive. The calculator above works out your own percentage for any filing status and household. These are federal figures only: add your state's income tax on top.
How self-employment tax is calculated
Net profit × 92.35% × (12.4% Social Security, up to the wage base + 2.9% Medicare) = self-employment tax
Example: $50,000 profit × 92.35% = $46,175.00; × 15.3% = $7,064.78.
- Start with net profit: business income minus business expenses (Schedule C). If net self-employment earnings are under $400, there's no self-employment tax.
- Multiply by 92.35%. This mirrors the fact that employees don't pay FICA on the employer's half. Skipping this step is a common mistake in online examples: it overstates the tax by about 8%.
- Social Security: 12.4% on those earnings up to the 2026 wage base of $184,500, minus any W-2 wages you had. The most anyone pays is $22,878.
- Medicare: 2.9% on all of it, with no cap. An extra 0.9% Additional Medicare Tax applies to combined wages and self-employment earnings over $200,000 ($250,000 joint, $125,000 married filing separately).
- Deduct half. Half of the self-employment tax is an adjustment to income. It lowers income tax, not self-employment tax.
Below the wage base, the combined rate works out to 14.13% of net profit (15.3% × 92.35%).
Self-employed versus employee: the FICA difference
Employees and self-employed people pay into Social Security and Medicare at the same combined rate; the difference is who pays which half. An employee pays 6.2% and 1.45% out of each paycheck and the employer pays a matching amount on top. When you work for yourself, you are both, so you pay both halves.
| You pay | Paid by an employer | Deductible for you | |
|---|---|---|---|
| W-2 employee | $3,825.00 | $3,825.00 | No |
| Self-employed | $7,064.78 | None | Half: $3,532.39 |
The self-employed bill is less than double the employee's share because of the 92.35% step, and the deduction for half of it lowers income tax a little more. It's still the main reason a freelance rate needs to be well above an hourly wage for the same job to come out ahead.
Turning the set-aside rate into a habit
The simplest system is to move a fixed share of every payment into a separate savings account the day it arrives. At the 19.5% rate for $50,000 of profit, a $2,500 client payment means setting aside $487. Base the percentage on profit, not on what clients pay you: if expenses take a large share of revenue, apply the rate to what's left after expenses. Recheck it mid-year; if your profit is running ahead of plan, the rate should go up.
Side business plus a W-2 job
The $184,500 Social Security wage base is shared between your W-2 wages and your self-employment earnings. Your employer already withheld Social Security on your wages, so Schedule SE applies the 12.4% only to the room left under the cap.
| Situation | Social Security part | Medicare part | Self-employment tax |
|---|---|---|---|
| No W-2 job | $5,725.70 | $1,339.08 | $7,064.78 |
| Also earning $150,000 in W-2 wages | $4,278.00 | $1,339.08 | $5,617.08 |
With $150,000 of wages, only $34,500 of room remains under the wage base, so the Social Security part shrinks. The Medicare part doesn't change. Income tax on the side profit is higher, though, because it stacks on top of the salary: this person's top rate is 24%. If you're married filing jointly, enter only your own W-2 wages in the calculator's wage-base field; your spouse's wages don't share your cap.
Income tax on self-employment profit (and QBI)
Profit is added to any other income. Then half the self-employment tax and any self-employed health insurance come off to give AGI; the standard deduction ($16,100 single, $32,200 joint) or itemized deductions come off next, then the qualified business income deduction, and the rest runs through the 2026 brackets.
The qualified business income (QBI) deduction
Most self-employed people can deduct up to 20% of their qualified business income. The 2025 tax law made the deduction permanent. Two limits matter for most people:
- It can't exceed 20% of taxable income before the deduction. At $50,000 of profit, QBI is $46,467.61 (profit minus the half-SE deduction), but taxable income before QBI is only $30,367.61, so the deduction is $6,073.52.
- New minimum: if you have at least $1,000 of qualified business income from businesses you actively run, the deduction is at least $400.
Above $201,750 of taxable income ($403,500 joint; $201,775 married filing separately), wage and property limits and the rules for specified service businesses start to phase in. The calculator applies QBI only below that threshold and tells you when you're above it, rather than guessing.
Deductions that cut your tax
Self-employed health insurance
Health insurance premiums you pay as a self-employed person are an adjustment to income, not an itemized deduction. You can't take it for any month you were eligible for an employer-subsidized plan (yours or your spouse's), and it can't exceed the business's net profit. It lowers income tax but not self-employment tax: on $60,000 of profit, $6,000 of premiums cuts total federal tax from $12,037 to $11,461, while self-employment tax stays $8,478.
Home office (simplified method)
Deduct $5 per square foot of space used regularly and exclusively for business, up to 300 square feet: a maximum of $1,500. There's no depreciation to track, but the deduction can't exceed the business's gross income from that use, and nothing carries over to the next year.
Business mileage
The 2026 standard mileage rate is 72.5¢ a mile from January 1 to June 30 and 76¢ from July 1, 2026. A driver with 4,000 business miles in each half of the year deducts $5,940. Keep a log of dates, miles and business purpose.
Business expenses like these reduce profit, so they cut both self-employment tax and income tax. Enter profit after expenses in the calculator.
1099 forms in 2026: what you'll receive
- Form 1099-NEC: clients must send one when they pay you $2,000 or more for payments made after December 31, 2025. The old threshold was $600.
- Form 1099-K: payment apps and online marketplaces report only when payments exceed $20,000 and there are more than 200 transactions in the year. The 2025 law restored that threshold retroactively.
A form is a reporting requirement for the payer, not a tax threshold for you. All self-employment income is taxable whether or not you receive a 1099.
Tips deduction for self-employed workers
If you earn tips in an occupation on the IRS list (proposed regulations name nearly 70), you can deduct up to $25,000 of qualified tips on Schedule 1-A, limited to the net income of that business. Self-employment tax still applies to the tips. The tips and overtime calculator covers the phase-out.
Paying it during the year
The IRS expects tax to be paid as income is earned. If you expect to owe $1,000 or more after withholding and credits, you generally need to make quarterly estimated payments. The quarterly tax calculator finds the smallest payment that keeps you penalty-free.
If you also have a W-2 job, there's an easier route: increase your withholding with Step 4(c) on your W-4. The W-4 calculator works out the extra amount per paycheck. Withholding counts toward the same safe harbors as estimated payments.
What this calculator doesn't cover
- state and local income tax, and any state or city business taxes;
- QBI above the threshold (wage, property and specified-service limits);
- retirement contributions such as a SEP-IRA or solo 401(k) (enter them as an adjustment if you know the amount);
- capital gains rates, the alternative minimum tax and education credits;
- farm income and church-employee income.
The EITC is a formula estimate assuming investment income of $12,200 or less.
Common questions
What is the self-employment tax rate for 2026?
15.3%: 12.4% Social Security on up to $184,500 of combined wages and self-employment earnings, plus 2.9% Medicare with no cap. It applies to 92.35% of net profit.
Do I pay self-employment tax on all my 1099 income?
On net profit (income minus business expenses), times 92.35%, once net earnings reach $400.
Is half of self-employment tax deductible?
Yes. Half is an adjustment to income on your return. It lowers income tax, not the self-employment tax itself.
What is the 1099-NEC threshold in 2026?
Payers must issue a 1099-NEC for $2,000 or more paid after December 31, 2025 (it was $600). You still report all income.
What is the 1099-K threshold now?
More than $20,000 and more than 200 transactions in a year.
Is the QBI deduction still available?
Yes, and it's now permanent. For 2026 the extra limits start above $201,750 of taxable income ($403,500 joint), and there's a new $400 minimum if you have at least $1,000 of active QBI.
What is the 2026 mileage rate?
72.5¢ per business mile through June 30, 2026, and 76¢ from July 1, 2026.
How much should I set aside from each payment?
It depends on your profit and household. For a single filer with no other income, federal tax runs from 14.8% of profit at $20,000 to 25.1% at $150,000, before state tax. The calculator gives your own figure.
Sources
- Self-employment tax (Social Security and Medicare taxes) — Internal Revenue Service. Accessed October 13, 2026.
- Schedule SE (Form 1040), Self-Employment Tax — Internal Revenue Service. Accessed October 13, 2026.
- Form 1040-ES (2026), Estimated Tax for Individuals — Internal Revenue Service. Accessed October 13, 2026.
- Contribution and benefit base — Social Security Administration. Accessed October 13, 2026.
- Topic no. 560, Additional Medicare Tax — Internal Revenue Service. Accessed October 13, 2026.
- The Working Families Tax Cuts: what gig economy workers should know (FS-2026-07) — Internal Revenue Service. Accessed October 13, 2026.
- Revenue Procedure 2025-32 (2026 inflation adjustments) — Internal Revenue Service. Accessed October 13, 2026.
- 26 U.S. Code §199A, Qualified business income — Legal Information Institute, Cornell Law School. Accessed October 13, 2026.
- Form 1099-MISC & independent contractors (FAQ) — Internal Revenue Service. Accessed October 13, 2026.
- Topic no. 502, Medical and dental expenses — Internal Revenue Service. Accessed October 13, 2026.
- Instructions for Form 7206, Self-Employed Health Insurance Deduction — Internal Revenue Service. Accessed October 13, 2026.
- Simplified option for home office deduction — Internal Revenue Service. Accessed October 13, 2026.
- IRS sets 2026 business standard mileage rate at 72.5 cents per mile — Internal Revenue Service. Accessed October 13, 2026.
- Internal Revenue Bulletin 2026-29 (mid-year mileage rate) — Internal Revenue Service. Accessed October 13, 2026.