# What is self-employment tax and how much is it in 2026?

Self-employment tax is the Social Security and Medicare tax that self-employed people pay on their own business profit. For 2026 the rate is 15.3%: 12.4% for Social Security and 2.9% for Medicare, figured on 92.35% of net earnings. You owe it, and file Schedule SE, when net earnings from self-employment are $400 or more. ProfitDrawer's free self-employed tax calculator shows this part on its own line.

Employees split these taxes with their employer. When you work for yourself, you pay both halves through self-employment tax.

**Worked example (example numbers only):** a $40,000 profit gives $40,000 x 92.35% = $36,940 of net earnings, and $36,940 x 15.3% = **$5,651.82** of self-employment tax.

Points to know:

- You can deduct the employer-equivalent portion (half) of your self-employment tax when figuring adjusted gross income. This lowers income tax only, not the self-employment tax itself.
- The 12.4% Social Security part applies only up to a yearly earnings limit, so at high incomes the real total is lower than the full 15.3%.
- An additional 0.9% Medicare tax applies above $200,000 (single), $250,000 (married filing jointly) or $125,000 (married filing separately).
- Federal income tax, and any state income tax, comes on top of self-employment tax.

Self-employed people usually pay both taxes during the year through quarterly estimated payments. General information, not tax advice.

- Source: [IRS: Self-employment tax (Social Security and Medicare taxes)](https://www.irs.gov/businesses/small-businesses-self-employed/self-employment-tax-social-security-and-medicare-taxes)
- Updated: 2026-10-29
- Published: 2026-10-29
- Category: Small business taxes
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