What is Self-employment tax?
Social Security and Medicare tax for people who work for themselves. It's about 15.3 percent of most of your net earnings.
Self-employment tax is how people who work for themselves pay into Social Security and Medicare. Employees split these taxes with their employer. Freelancers pay both halves.
How it’s figured
- Take your net profit from Schedule C and multiply by 92.35%.
- Pay 12.4% for Social Security on that amount, up to the 2026 wage base of $184,500 (minus any wages from a job).
- Pay 2.9% for Medicare on all of it.
- Above $200,000 ($250,000 married filing jointly), an extra 0.9% Medicare tax applies.
You don’t owe it if your net earnings are under $400. And half of it (not counting the extra 0.9%) is deductible on your income tax return.
Why it surprises people
It’s on top of income tax. A freelancer with $60,000 of profit owes about $8,500 in self-employment tax before any income tax. That’s why quarterly estimated taxes exist, and why a 25 to 30 percent set-aside is a common rule of thumb. Our quarterly tax calculator includes it.
This is a plain-words definition, not tax advice.
Questions people ask
Why do freelancers pay double Social Security?
Employees and employers each pay half, 7.65 percent apiece. When you work for yourself, you're both, so you pay both halves. You can deduct half of it when figuring your income tax.
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