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Self-Employment Tax Estimator
Revenue Parameters
Estimated Liabilities
Guide to US Self-Employment Tax Structure
If you run a sole proprietorship, work as a freelancer, or manage a single-member LLC, you must pay self-employment tax. This tax is distinct from regular income tax and funds your Social Security and Medicare allocations.
How Self-Employment Tax Works
W-2 employees have 7.65% deducted from their paychecks for Social Security and Medicare, which their employers match for a total of 15.3%. Self-employed business owners must cover both portions, leading to a flat 15.3% rate on 92.35% of their net Schedule C income.
FICA Tax Caps & Additional Medicare Taxes
For the tax year 2026, the Social Security tax portion (12.4%) only applies to the first $176,100 of net income. However, the Medicare portion (2.9%) has no income ceiling. Furthermore, an additional 0.9% Medicare tax is applied to incomes exceeding $200,000 for single filers or $250,000 for married couples filing jointly.
How Federal Income Tax Blends In
Your net business income is also subject to ordinary federal income taxes. Fortunately, the IRS permits you to deduct half of your self-employment tax (50% of the 15.3%) from your Adjusted Gross Income (AGI) when filing Form 1040, lowering your overall tax bill.