Schedule SE tax on freelance, 1099 and gig income, including the deductible half
Net profit is what's left after business expenses on Schedule C, not gross revenue. W-2 wages matter because they use up part of the $184,500 Social Security wage base and count toward the 0.9% surtax threshold.
| Component | Rate | 2026 Base | Applies To |
|---|---|---|---|
| Social Security | 12.4% | First $184,500 of combined wages + net earnings | Employee half 6.2% + employer half 6.2% |
| Medicare | 2.9% | No cap, all net earnings | Employee half 1.45% + employer half 1.45% |
| Additional Medicare | 0.9% | Net earnings above $200,000 single / $250,000 joint (wages count first) | Employee side only, no employer match |
| × 0.9235 adjustment | — | Net earnings = Schedule C profit × 92.35% | Mimics the employer half being excluded from wage taxation |
The wage base is indexed to national wages every year: $168,600 in 2024, $176,100 in 2025, $184,500 in 2026. The maximum Social Security component of SE tax in 2026 is 12.4% × $184,500 = $22,878.
| Net Profit | Net Earnings (92.35%) | SE Tax | Deductible Half | Effective Rate on Profit |
|---|---|---|---|---|
| $30,000 | $27,705 | $4,239 | $2,119 | 14.13% |
| $60,000 | $55,410 | $8,478 | $4,239 | 14.13% |
| $90,000 | $83,115 | $12,717 | $6,358 | 14.13% |
| $150,000 | $138,525 | $21,194 | $10,597 | 14.13% |
| $250,000 (single) | $230,875 | $29,851 | $14,926 | 11.94% |
The effective rate dips once earnings pass the wage base and Medicare-only dollars (2.9% + 0.9%) stack on top. Below the Social Security cap, every dollar of profit carries the same 14.13% effective SE load (15.3% × 0.9235).
Self-employment tax is the freelancer's version of FICA. Employees have 6.2% for Social Security and 1.45% for Medicare withheld, and their employer matches it. When you work for yourself, you're both parties, so you pay both halves: 15.3% total. The calculator walks your net profit through Schedule SE's actual sequence.
Net earnings = net profit × 0.9235. Social Security tax = 12.4% × net earnings, but only on the first $184,500 of combined wages and net earnings for 2026 (your W-2 wages eat into the cap first). Medicare = 2.9% × all net earnings. Above $200,000 single or $250,000 joint, add 0.9% on the excess net earnings. Sum those, and half the total is your above-the-line deduction.
Enter your expected Schedule C profit for the year, any W-2 wages from a day job, and your filing status. If you're a gig worker with only 1099 income, leave wages at zero. The results break out each component so you can see where the money goes, and the effective rate line tells you what SE tax really costs per dollar of profit.
A freelance designer expects $90,000 of net profit and has no W-2 job. Net earnings are 90,000 × 0.9235 = $83,115. Social Security: 12.4% × 83,115 = $10,306 (well under the cap). Medicare: 2.9% × 83,115 = $2,410. No surtax applies. Total SE tax: $12,717, an effective 14.13% on profit. She deducts half, $6,358, which reduces her AGI before her income tax is computed.
Now the flip side. A consultant nets $250,000 and files single. Net earnings are $230,875, so Social Security stops at $184,500 and costs the max $22,878. Medicare runs on everything: 2.9% × 230,875 = $6,695. The 0.9% surtax adds $278 on the $30,875 above $200,000. Total: $29,851, but the effective rate falls to 11.94% because dollars past the cap only carry Medicare. That's why high earners often stop noticing SE tax as a flat 15.3%.
15.3% on 92.35% of net self-employment earnings: 12.4% for Social Security on earnings up to $184,500 in 2026, and 2.9% for Medicare with no cap. Above $200,000 single or $250,000 married filing jointly, a 0.9% additional Medicare tax kicks in on the excess. Because you pay both the employee and employer halves, the rate is double what a W-2 worker sees withheld.
Take net profit from Schedule C, multiply by 0.9235, then apply 12.4% up to the Social Security wage base ($184,500 in 2026, reduced by any W-2 wages) and 2.9% on everything. On $90,000 of net profit: 90,000 × 0.9235 = $83,115 of net earnings, $10,306 Social Security + $2,410 Medicare = $12,717 of SE tax, and half of it, $6,358, is deductible.
Every worker's Social Security and Medicare cost is really 15.3%; a W-2 employee sees 7.65% withheld and the employer quietly pays the other half. When you're self-employed you are both parties, so you pay both halves. The tax code softens the hit by letting you deduct the employer half (half your SE tax) from your adjusted gross income.
Only the Social Security piece caps. The 12.4% part applies to at most $184,500 of 2026 combined wages and net earnings, so the largest possible Social Security component is $22,878. The 2.9% Medicare piece has no ceiling, and above $200,000 single or $250,000 joint, the extra 0.9% applies too, so high earners keep paying Medicare tax on every dollar.
There's a small floor: you owe SE tax only when net earnings are $400 or more for the year. Below that, Schedule SE doesn't apply. Note that the $400 test uses net earnings (profit × 0.9235 effectively matters at the margins), and even tiny side profits must be reported on Schedule C regardless of whether SE tax applies.
Yes, and it's an adjustment to income, not an itemized deduction, so you get it even if you take the standard deduction. If your SE tax is $12,717, you deduct $6,358 on Schedule 1, which lowers your AGI and your income tax. The deduction doesn't reduce SE tax itself; it offsets part of the income tax sting.