Self-Employment Tax Basics Without Mixing It Up with Income Tax
Self-employment tax (SECA) is how many freelancers and sole proprietors pay into Social Security and Medicare. It is separate from federal income tax. For Tax Year 2026, educational estimators still use the familiar 15.3% combined SE rate structure—12.4% Social Security and 2.9% Medicare—applied to net earnings after the 92.35% factor, with Social Security limited by the annual wage base.
SECA Is Not Ordinary Income Tax
Ordinary income tax uses brackets on taxable income. Self-employment tax funds Social Security and Medicare based on net earnings from self-employment. You may owe both. Deducting one-half of SE tax (generally excluding Additional Medicare Tax) is an income-tax adjustment—shown separately in our estimator.
Why 92.35%?
Schedule SE multiplies net profit by 92.35% before applying SE rates. The factor approximates removing the employer-equivalent portion from the SE tax base. Skipping it overstates Social Security and Medicare on net profit.
The 2026 Wage Base Still Caps Social Security
For 2026, the Social Security contribution and benefit base is $184,500. W-2 Social Security wages consume that base first. If wages already reach the base, additional self-employment earnings may still owe Medicare SE tax while Social Security SE tax is zero in a simplified model.
Estimate SE tax on net profit
Enter net profit, filing status, and any W-2 Social Security wages:
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