How self-employment tax works
Self-employed people pay both halves of Social Security and Medicare: 15.3% (12.4% + 2.9%) on 92.35% of net profit. Social Security stops at the 2026 wage base of $184,500, counting any W-2 wages. You can deduct half of the SE tax from your income.
Example
With $60,000 of net profit and no other job, SE tax is about $8,478. Adding an estimated $4,511 of federal income tax, set aside about $3,247 each quarter.
Quarterly estimated taxes are due in April, June, September and January. State taxes are extra.
Frequently asked questions
Can I lower it?
Deduct legitimate business expenses, and consider a SEP-IRA or Solo 401(k). An S corporation can help at higher profits; ask a tax professional.
See also
Results are estimates for information only and are not financial, legal or medical advice. Rates, taxes and fees vary — confirm with a professional or your lender.