2026 rates
Self-Employment Tax Rate
What the 15.3% self-employment tax is, how it splits between Social Security and Medicare, and how much you'll actually owe.
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. It's charged on 92.35% of your net profit, not the whole amount. The Social Security part stops at the annual wage base; the Medicare part has no cap and adds 0.9% above $200,000. You can deduct half of it on your income taxes.
Your gross 1099 / freelance income for the year.
Deductible costs — supplies, software, mileage, home office.
Set aside for taxes
21.8%
$13,097 total · $3,274.31/quarter
- Net profit
- $60,000
- Self-employment tax (15.3%)
- $8,478
- Federal income tax
- $3,071
- State income tax
- $1,548
- Total estimated tax
- $13,097
- After-tax income
- $46,903
Pay each quarter$3,274.31
Four equal estimated-tax payments (Form 1040-ES).
How the 15.3% breaks down
| Component | Rate | Applies to |
|---|---|---|
| Social Security | 12.4% | 92.35% of profit, up to the wage base |
| Medicare | 2.9% | 92.35% of profit, no cap |
| Additional Medicare | 0.9% | amounts above $200,000 |
| Combined SE tax | 15.3% | 92.35% of net profit |
Why 92.35%? It represents your profit after subtracting the “employer half” of the tax, mirroring how a W-2 employee's wages exclude the employer's share. That's also why you can deduct half of the SE tax when figuring your income tax.
Frequently asked questions
How much should I set aside for 1099 taxes?+
A common rule of thumb is to set aside 25%–30% of your net self-employment income for taxes, but the right number depends on your total income, filing status, and state. It covers three things: self-employment (SE) tax of 15.3%, federal income tax, and any state income tax. Enter your income above and the calculator shows your exact set-aside percentage and the amount per quarter.
What is the self-employment tax rate?+
The self-employment tax rate is 15.3% — 12.4% for Social Security plus 2.9% for Medicare. It applies to 92.35% of your net profit (not the full amount), and the Social Security portion only applies up to the annual wage base. High earners pay an extra 0.9% Medicare surtax above $200,000. SE tax is separate from, and on top of, income tax.
How is 1099 tax different from W-2 tax?+
As a W-2 employee, your employer pays half of your Social Security and Medicare (7.65%) and withholds income tax from each paycheck. As a 1099 contractor you're both employer and employee, so you pay the full 15.3% SE tax yourself — and no tax is withheld, so you make quarterly estimated payments. You can deduct half of the SE tax and your business expenses, which softens the difference.
Do I have to pay taxes quarterly as a 1099 worker?+
Generally yes. If you expect to owe $1,000 or more, the IRS wants estimated tax paid in four installments (typically April 15, June 15, September 15, and January 15). Missing them can trigger an underpayment penalty. The calculator divides your estimated annual tax into four equal payments so you know what to send each quarter.
What deductions lower my self-employment tax?+
Ordinary and necessary business expenses — supplies, software, mileage, a home office, health insurance premiums, and retirement contributions — reduce your net profit, and SE tax is charged on profit, so every deductible dollar cuts both SE and income tax. On the income-tax side you may also qualify for the 20% Qualified Business Income (QBI) deduction. Enter your expenses above to see the effect.
Are these 1099 tax estimates exact?+
No — treat them as planning estimates. They use 2026 federal brackets and representative state income tax, apply the standard deduction, and simplify QBI and the additional-Medicare threshold. Your actual return depends on other income, credits, and deductions. Use this to size your quarterly payments, and confirm with a tax professional or the IRS forms (Schedule C, Schedule SE, Form 1040-ES).
Ready to plan payments? See quarterly estimated taxes or go back to the full 1099 tax calculator.
2026 figures, simplified — a planning estimate, not tax advice. See IRS Schedule SE for the official computation.