Self-Employment Tax Calculator 2026
Compute IRS Schedule SE taxes, quarterly estimated payments, deductions, and net income for freelancers, contractors, and small business owners
Income & Business Details
Deductions & Adjustments
Tax Year & Payment Options
Tax Analysis Results
Updated in real-timeTax Breakdown
Quarterly Estimated Tax Payments
Based on equal quarterly payments. Consider adjusting if income varies throughout the year.
Understanding Self-Employment Taxes
Self-employment tax is the Social Security and Medicare tax equivalent for individuals who work for themselves. Unlike traditional employees who split these taxes with their employers (7.65% each), self-employed individuals must pay the full 15.3% themselves. This calculator helps you understand your complete tax liability as a freelancer, independent contractor, or small business owner.
Who Needs to Pay Self-Employment Tax?
You must pay self-employment tax if your net earnings from self-employment are $400 or more. This applies to:
- Freelancers and independent contractors receiving 1099-NEC forms
- Small business owners operating as sole proprietors or single-member LLCs
- Gig economy workers (Uber drivers, TaskRabbit, freelance writers, etc.)
- Consultants and professionals with their own practice
- Part-time self-employed individuals in addition to regular employment
Key Components of Self-Employment Tax
The 15.3% self-employment tax consists of two parts:
- Social Security Tax (12.4%): Applies to the first $168,600 of net earnings (2026 projected limit). This funds retirement, disability, and survivor benefits.
- Medicare Tax (2.9%): No income limit. Additional 0.9% Medicare surtax applies to earnings over $200,000 ($250,000 for married filing jointly).
Self-employed individuals report these taxes on Schedule SE (Form 1040) and pay them along with income tax through quarterly estimated tax payments.
Self-Employment Tax Calculation Formula
The IRS uses a specific formula to calculate self-employment tax liability:
Note: The Social Security portion (12.4%) only applies to the first $168,600 of net earnings (2026 projection). Medicare tax (2.9%) applies to all net earnings with no limit.
Real-World Examples
Situation: Sarah is a freelance web developer with $95,000 in gross income and $18,000 in deductible business expenses (software, home office, equipment). She has no other income, is single, and contributes $6,000 to a SEP-IRA.
Calculation: Net earnings = $95,000 - $18,000 = $77,000. Self-employment tax = ($77,000 × 0.9235) × 0.153 = $10,872. After deductions (½ SE tax, QBI deduction, retirement contribution), her total federal tax liability is approximately $17,200.
Situation: Michael runs a consulting business with $125,000 gross income and $25,000 expenses. His spouse earns $65,000 as a W-2 employee. They file jointly, have two children, and contribute $12,000 to a Solo 401(k).
Calculation: Michael's net earnings = $100,000. Self-employment tax = ($100,000 × 0.9235) × 0.153 = $14,129. Combined with spouse's income and after all deductions/credits, their total federal tax liability is approximately $28,500.
Quarterly Estimated Tax Payments
Self-employed individuals generally need to make quarterly estimated tax payments to avoid penalties. The IRS requires you to pay taxes as you earn income throughout the year.
When Are Quarterly Payments Due?
For the 2026 tax year, estimated tax payments are due on:
- April 15, 2026: For income earned January 1 - March 31, 2026
- June 15, 2026: For income earned April 1 - May 31, 2026
- September 15, 2026: For income earned June 1 - August 31, 2026
- January 15, 2027: For income earned September 1 - December 31, 2026
How to Calculate Quarterly Payments
You can use one of two methods to calculate your quarterly payments:
- Annualized Income Method: Calculate your tax liability based on actual income earned each quarter. This is beneficial if your income varies significantly throughout the year.
- Equal Payment Method: Divide your total estimated annual tax liability by four. Most taxpayers use this method for simplicity.
Avoiding Underpayment Penalties
To avoid IRS penalties for underpayment of estimated taxes, you must generally pay at least:
- 90% of your current year's tax liability, OR
- 100% of your prior year's tax liability (110% if your prior year adjusted gross income exceeded $150,000)
This is known as the "safe harbor" rule. Our calculator automatically applies this rule when you check the "Use Prior Year Safe Harbor" option.
Maximizing Deductions for Self-Employed
One of the key advantages of self-employment is the ability to deduct legitimate business expenses, which reduces both your income tax and self-employment tax liability.
Common Deductible Business Expenses
- Home Office Deduction: If you use part of your home regularly and exclusively for business, you can deduct related expenses (mortgage interest, rent, utilities, insurance, repairs) based on the percentage of your home used for business.
- Vehicle Expenses: Deduct either the standard mileage rate (projected 67 cents per mile for 2026) or actual expenses (gas, repairs, insurance, depreciation) for business-related driving.
- Equipment and Supplies: Computers, software, office furniture, and other necessary business equipment.
- Professional Services: Legal fees, accounting services, business coaching, and software subscriptions.
- Marketing and Advertising: Website costs, business cards, online ads, and promotional materials.
- Health Insurance Premiums: 100% deductible for self-employed individuals and their families.
- Retirement Contributions: SEP-IRA, Solo 401(k), or SIMPLE IRA contributions are deductible and reduce taxable income.
Special Self-Employment Deductions
In addition to business expenses, self-employed individuals can claim these special deductions:
- 50% of Self-Employment Tax Deduction: You can deduct half of your self-employment tax on Form 1040, reducing your taxable income for income tax purposes (but not for self-employment tax).
- Qualified Business Income (QBI) Deduction: Up to 20% of qualified business income for pass-through entities (sole proprietorships, partnerships, S corporations, LLCs). Subject to income limitations and phase-outs.
- Self-Employed Health Insurance Deduction: Premiums paid for medical, dental, and qualified long-term care insurance for yourself, your spouse, and dependents.
Important: Keep detailed records of all business expenses, including receipts, invoices, and mileage logs. The IRS may require documentation if your return is selected for audit.
Frequently Asked Questions
For 2026, the self-employment tax rate is projected to remain at 15.3%, consisting of:
- 12.4% for Social Security (on income up to the taxable maximum, projected to be $168,600 for 2026)
- 2.9% for Medicare (with no income limit)
High-income earners may also owe an additional 0.9% Medicare surtax on self-employment income over $200,000 ($250,000 for married filing jointly). This calculator automatically applies the surtax when applicable.
Quarterly estimated tax payments are calculated by dividing your total annual tax liability (including both income tax and self-employment tax) by four. Payments are typically due:
- April 15 (for Jan-Mar income)
- June 15 (for Apr-May income)
- September 15 (for Jun-Aug income)
- January 15 of the following year (for Sep-Dec income)
You can use our calculator to determine your quarterly payments. Consider using the annualized income method if your income varies significantly throughout the year, as it may lower your required payments in earlier quarters.
Self-employed individuals can deduct:
- Business expenses: Home office, supplies, equipment, vehicle expenses, professional services, marketing, and travel
- 50% of self-employment tax: Deductible on Form 1040 to reduce taxable income
- Health insurance premiums: 100% deductible for medical, dental, and qualified long-term care insurance
- Retirement contributions: SEP-IRA, Solo 401(k), or SIMPLE IRA contributions
- Qualified Business Income (QBI) deduction: Up to 20% of net business income, subject to limitations
These deductions significantly reduce your tax liability. Always maintain proper documentation for all deductions claimed.
Schedule C (Form 1040) reports business profit or loss from your sole proprietorship. It calculates your net profit (gross income minus business expenses), which becomes part of your adjusted gross income.
Schedule SE (Form 1040) calculates the self-employment tax owed on your net earnings from self-employment reported on Schedule C. The calculation applies the 15.3% tax rate to 92.35% of your net earnings.
In simple terms: Schedule C determines how much you earned from your business, while Schedule SE determines how much self-employment tax you owe on those earnings.
The Qualified Business Income (QBI) deduction reduces your taxable income for income tax purposes but does NOT reduce your net earnings subject to self-employment tax. Key points:
- QBI deduction is generally 20% of qualified business income
- It's taken on Form 1040, not on Schedule C or Schedule SE
- Subject to limitations based on taxable income, type of business, and W-2 wages paid
- For 2026, phase-outs begin at $191,950 for single filers and $383,900 for joint filers (projected inflation-adjusted amounts)
Our calculator automatically applies the QBI deduction when enabled and accounts for applicable limitations.
Maintain these records for at least 7 years:
- Income records: Invoices, payment receipts, 1099 forms, bank statements
- Expense records: Receipts, canceled checks, credit card statements
- Home office documentation: Measurements, photos, utility bills
- Vehicle expenses: Mileage logs, maintenance receipts, insurance documents
- Asset purchases: Receipts for equipment, computers, furniture
- Health insurance: Premium payment records
- Retirement contributions: Contribution confirmations
Digital records are acceptable. Consider using accounting software or apps to track expenses throughout the year.
Yes, the IRS imposes penalties if you don't pay enough tax through withholding and estimated tax payments. Generally, you must pay at least:
- 90% of the current year's tax liability, OR
- 100% of the prior year's tax liability (110% if your prior year adjusted gross income exceeded $150,000)
Penalties are calculated based on the underpayment amount and the time it was underpaid. The annual penalty rate for 2026 is projected to be around 7% (equal to the federal short-term rate plus 3%).
Our calculator helps you avoid penalties by calculating required quarterly payments based on either the current year's liability or the prior year safe harbor rule.