Self-employment tax: the 15.3% rate, the 92.35% step and the half you can deduct

What is the self-employment tax rate?

The self-employment tax rate is 15.3%: 12.4% for Social Security and 2.9% for Medicare, applied to 92.35% of net earnings from self-employment (IRS Topic 554). Because only 92.35% of profit is taxed, the real rate on each dollar of net profit is about 14.13% until you reach the Social Security wage base.

Self-employment tax is the Social Security and Medicare tax for people who work for themselves. An employee splits these taxes with an employer; a sole proprietor, independent contractor or partner in a business pays both halves. The rate for self-employment tax 2026 returns is the same 15.3% used for many years; only the wage base changes.

Who has to pay self-employment tax?

You must pay self-employment tax if your net earnings from self-employment are $400 or more for the year. The threshold for church employee income is lower, at $108.28, unless you hold an exemption (IRS Topic 554).

• Sole proprietors and single-member LLC owners who report on Schedule C.
• Independent contractors paid on Form 1099-NEC or through payment apps that issue Form 1099-K.
• Members of partnerships that carry on a trade or business, from their Schedule K-1.
• Farmers reporting on Schedule F.

The tax applies even if you owe no income tax. A part-time seller with $9,000 of profit and a large standard deduction can have zero income tax and still owe about $1,272 of self-employment tax. Not receiving a Form 1099 does not change this: the income is taxable whether or not a payer sends a form.

How is self-employment tax calculated on Schedule SE?

Schedule SE (Form 1040) turns net profit into self-employment tax in four moves. The result goes on Schedule 2 of Form 1040 and is added to your total tax.

1. Start with net profit from Schedule C (line 31), Schedule F, or your partnership K-1.
2. Multiply by 92.35% to get net earnings from self-employment. If the result is under $400, stop; you owe no self-employment tax.
3. Apply 12.4% to net earnings up to $184,500 for 2026, minus any Social Security wages you already had from a job.
4. Apply 2.9% to all net earnings, with no cap, and add the two amounts.

The 92.35% figure equals 100% minus 7.65%. It mirrors the way an employer's half of FICA is not counted as the employee's wages, so a self-employed person is not taxed on the portion that stands in for the employer share.

Worked example: $80,000 of net profit

A single graphic designer has $80,000 of net profit on Schedule C for 2026 and no W-2 job. Here is the Schedule SE math.

The designer pays $11,303.64 of self-employment tax and subtracts $5,651.82 when figuring adjusted gross income. To run your own figures, use our self-employment tax calculator.

How does the Social Security wage base limit self-employment tax?

The 12.4% Social Security part applies only up to the 2026 wage base of $184,500, and W-2 Social Security wages use up that room first. The 2.9% Medicare part has no limit. This is the same ceiling explained on our Social Security tax and wage base page. For 2027 the base rises to $192,300, announced by SSA on October 14, 2026, which lifts the most Social Security tax a self-employed person can owe from $22,878 to $23,845.20; see the 2027 Social Security wage base.

Example: an engineer earns $150,000 in W-2 wages and has $70,000 of consulting profit. Net earnings are $64,645, but only $34,500 of room remains under the cap. Social Security tax is $4,278.00 (12.4% of $34,500) and Medicare tax is $1,874.71 (2.9% of $64,645), for $6,152.71 total. Without the job, the same profit would carry $9,890.69 of self-employment tax.

Someone with no wages reaches the cap at about $199,783 of net profit. Above that, each extra dollar of profit carries only the 2.9% Medicare rate, plus the 0.9% Additional Medicare Tax once combined wages and self-employment income pass $200,000 for single filers or $250,000 for joint filers. That surtax is figured on Form 8959.

Can I deduct half of self-employment tax?

Yes. You deduct one-half of your self-employment tax as an adjustment to income on Schedule 1 (Form 1040), whether or not you itemize (IRS Topic 554). It lowers income tax, but it does not reduce the self-employment tax itself.

• The deduction is figured on Schedule SE and carried to Schedule 1.
• The 0.9% Additional Medicare Tax is not part of the deductible half.
• The qualified business income deduction lowers income tax only; it does not reduce net earnings for self-employment tax.
• Business expenses on Schedule C are the main legal way to lower self-employment tax, because they reduce net profit before the 92.35% step.

Special cases on Schedule SE

Married couples

If both spouses have self-employment income, each files a separate Schedule SE, even on a joint return. Each spouse has a separate $184,500 cap and a separate $400 threshold, and earnings are credited to each person's own Social Security record.

A net loss

A self-employment loss means no self-employment tax for that business, but it cannot reduce the FICA already withheld from a W-2 job. Low-profit filers can look at the optional methods in the Schedule SE instructions to keep earning Social Security credits.

Paying self-employment tax during the year

No employer withholds self-employment tax, so you prepay it through estimated taxes if you expect to owe at least $1,000 for the year after withholding and credits. The 2026 due dates are April 15, June 15 and September 15, 2026 and January 15, 2027. Our page on estimated taxes for the self-employed shows how to size each payment, and the FICA tax hub compares this with what employees pay.