What do you owe in self-employment tax?
Schedule SE is the bill that catches out first-year freelancers: 15.3% on top of income tax, due whether or not you set anything aside.
Free · no signup · runs entirely in your browser
Everything clients paid you this year, before any deductions. Schedule C line 1.
Software, hardware, insurance, home office, mileage, subcontractors. Not personal costs.
Sets the Social Security wage base — the cap above which the 12.4% stops applying.
Net profit
$73,000
Schedule C line 31. This — not your gross — is what self-employment tax is charged on.
Self-employment tax owed · 2026
$10,315
14.1% of net profit, on top of any income tax.
How it breaks down
Set aside
This covers self-employment tax only. Your income tax is on top and is not included below.
2026 wage base not confirmed. We do not hold a published Social Security wage base for 2026, so this uses the most recent one we do have. The Medicare portion is unaffected; the Social Security portion may be slightly low if your profit is near the cap.
This deliberately does not estimate your income tax. Income tax depends on your filing status, household income, deductions and the QBI deduction — none of which this page knows. Self-employment tax follows from your net profit alone, so it can be stated honestly. A number that looks authoritative and is a guess is worse than no number.
The bill nobody warns you about
The first year of freelancing has a predictable shape. You earn more than you did on salary, you feel briefly wealthy, and then a tax bill arrives that is roughly 15% larger than anything your employed self ever saw. That gap is self-employment tax, and it is not a penalty or a surcharge — it is the half of Social Security and Medicare your employer used to pay quietly on your behalf.
As an employee you paid 7.65% and your employer matched it. Working for yourself you are both parties, so you pay 15.3%. It sits on top of income tax, not instead of it.
How the number is built
- Start with net profit, not gross income. Business income minus deductible business expenses — Schedule C line 31. Every legitimate expense you record lowers this figure and therefore lowers the tax.
- Multiply by 92.35%. Only that share of net profit is subject to the tax, which offsets the employer half you are notionally paying.
- Apply 12.4% for Social Security, but only up to that year's wage base. Earnings above the cap escape this portion entirely.
- Apply 2.9% for Medicare on the whole amount. No cap applies.
- Deduct half on your 1040. It reduces adjusted gross income, so it lowers income tax — not self-employment tax.
Below $400 of net earnings there is no self-employment tax at all, though the income remains reportable.
The lever you actually control
You cannot change the rate. You can change what it applies to. Because the tax is charged on profit rather than revenue, every deductible expense you fail to record costs you roughly 15 cents in self-employment tax on top of whatever income tax you pay on it — before you count the deduction you also lost.
This is why untracked expenses are expensive in a way that does not feel expensive. A $1,200 laptop you never recorded is not a $1,200 mistake; it is $1,200 of profit you paid tax on for no reason. Most of what makes tax season painful is a year of small receipts nobody kept.
What this page will not do
It will not estimate your income tax, and that is deliberate. Income tax depends on filing status, household income, deductions and the QBI deduction. Any total produced without them would be confident, specific, and wrong — and you would plan around it. Self-employment tax is different: it derives from net profit and nothing else, so it can be stated honestly and acted on.
Related
If you are setting a rate for next year, the rate calculator works backwards from take-home pay and includes this tax in the calculation. If you want to know how many months of cushion your after-tax income buys you, use the runway calculator.
This is general information about how Schedule SE works, not tax advice for your situation. For anything consequential, talk to a qualified accountant.
Common questions
- What is self-employment tax?
- It is Social Security and Medicare — the same taxes an employee pays, except an employee splits them with their employer. Self-employed people are both, so they pay both halves: 12.4% for Social Security and 2.9% for Medicare, 15.3% in total. It is charged on your net profit and it is entirely separate from income tax, which is why so many first-year freelancers are caught out.
- Why is it charged on 92.35% of my profit rather than all of it?
- Because an employer's half of payroll tax is a deductible business expense, and the rule keeps the self-employed in the same position. Multiplying net profit by 92.35% removes the equivalent of that employer half before the tax is applied. It is not a discount — it is the arithmetic that stops you being taxed on tax.
- What is the Social Security wage base?
- A ceiling. The 12.4% Social Security portion only applies to earnings up to a cap that is published annually — $176,100 for 2025. Above that, only the 2.9% Medicare portion continues, which is why the effective rate drops sharply for higher earners. Medicare has no cap.
- Can I deduct any of it?
- Half. One half of your self-employment tax is an above-the-line deduction on Form 1040, which reduces your adjusted gross income and therefore your income tax. It does not reduce the self-employment tax itself. The calculator shows the deductible half separately.
- Why does this not tell me my total tax bill?
- Because it cannot, honestly. Self-employment tax follows from net profit alone, so it can be stated exactly. Income tax depends on your filing status, your spouse's income, whether you itemise, the standard deduction and the qualified business income deduction — none of which this page knows. A total that looked authoritative would be a guess wearing a number's clothing, and you would budget against it.
- When do I actually have to pay it?
- Quarterly, through estimated tax payments, rather than in one lump in April. The usual due dates are 15 April, 15 June, 15 September and 15 January of the following year. Underpaying across the year can attract a penalty even if you settle in full at filing, so the per-quarter figure in the calculator is the one worth acting on.
This is one number. Runway tracks all of them.
Runway tracks deductible expenses all year and arranges them into Schedule C shape, so this number is already computed in April.
Create your free account