How self-employment tax works
If you work for yourself you pay the employee and employer shares of Social Security and Medicare — 15.3% in total — on 92.35% of your net profit (the 7.65% reduction mirrors the employer half that an employee never sees). You owe SE tax once net earnings from self-employment reach $400.
| Part | Rate | Applies to |
|---|---|---|
| Social Security (OASDI) | 12.4% | Up to $184,500 in 2026 ($192,300 in 2027), minus W-2 Social Security wages |
| Medicare (HI) | 2.9% | All net SE earnings |
| Additional Medicare | 0.9% | Above $200,000 (single, head of household, QSS), $250,000 (joint), $125,000 (separate) — reduced by W-2 wages |
Step by step
- Net SE earnings = net profit × 92.35%.
- Social Security = 12.4% × the smaller of net SE earnings and (wage base − W-2 wages).
- Medicare = 2.9% × net SE earnings.
- Half of that SE tax is an above-the-line deduction on Schedule 1; it lowers income tax, not SE tax.
- Additional Medicare (Form 8959) = 0.9% × net SE earnings above (threshold − wages). The thresholds are fixed in law and not indexed for inflation.
Quarterly estimated tax due dates
| Period | Tax year 2026 | Tax year 2027 |
|---|---|---|
| Q1 (Jan–Mar) | Apr 15, 2026 | Apr 15, 2027 |
| Q2 (Apr–May) | Jun 15, 2026 | Jun 15, 2027 |
| Q3 (Jun–Aug) | Sep 15, 2026 | Sep 15, 2027 |
| Q4 (Sep–Dec) | Jan 15, 2027 | Jan 18, 2028 |
2027 dates follow the statutory 15th-of-the-month schedule and the IRS weekend/holiday rule; the IRS publishes them in the 2027 Form 1040-ES. You generally avoid an underpayment penalty if you pay at least 90% of this year’s tax or 100% of last year’s (110% if your AGI was over $150,000).
FAQ
How much self-employment tax do I pay on $50,000?
About $7,064.78 in 2026: $50,000 × 92.35% = $46,175; 12.4% Social Security ($5,725.70) plus 2.9% Medicare ($1,339.08). You can deduct half, $3,532.39, from your income.
What is the Social Security wage base for 2026?
$184,500. Above that, only the 2.9% Medicare part applies. For 2027 the SSA has announced $192,300.
Do W-2 wages reduce my self-employment tax?
Yes, for Social Security: wages already taxed at 6.2% use up the wage base first. If you earned $150,000 in wages in 2026, only $34,500 of SE earnings is subject to the 12.4% part. Medicare still applies to all SE earnings.
When are 2026 quarterly estimated taxes due?
April 15, June 15 and September 15, 2026, and January 15, 2027. For 2027: April 15, June 15, September 15, 2027 and January 18, 2028.
Sources (checked 5 November 2026): SSA “2027 Social Security Changes” fact sheet (ssa.gov/cola/factsheets/2027.html — maximum taxable earnings $184,500 for 2026 and $192,300 for 2027; self-employed rate 15.3%); IRS Taxpayer Advocate Service “Important tax dates 2026”; IRS estimated tax FAQ (weekend/holiday rule, updated 16 Oct 2026); IRC §§ 1401, 1402 and 164(f); Form 8959 and Schedule SE instructions.