Self-Employment Tax Calculator 2026
15.3% SE tax, QBI 199A deduction, federal & state income tax for freelancers
Last updated: November 2025 · Sources: IRS Schedule SE, IRC §1401/1402, §199A, SSA 2026 Fact Sheet
Earnings
Schedule C profit, gross revenue minus business expenses.
Used to apply the $184,500 SS wage base across both jobs.
Schedule SE Calculation
Federal Income Tax
State Tax (California)
Total Tax Summary
Understanding 2026 Self-Employment Tax
SE Tax = FICA for the Self-Employed
Self-employment tax (IRC §1401) replaces the FICA that employers and employees split when you work for someone else. The rate is 15.3% on 92.35% of net earnings: 12.4% Social Security (up to the wage base) + 2.9% Medicare (uncapped). The 92.35% factor (IRC §1402(a)(12)) equals 1 minus the employer-share of FICA (7.65%), since the self-employed pay both halves but get a parity adjustment. Half of the basic 15.3% SE tax is deductible "above the line" on Form 1040 Schedule 1 (IRC §164(f)), which reduces your AGI.
The Social Security Wage Base
The 2026 SS wage base is $184,500. Combined wages from all sources (W-2 + SE net × 0.9235) only pay the 12.4% SS portion up to this cap. Example: you earn $120,000 W-2 + $80,000 SE; net SE × 0.9235 = $73,880; cap remaining = $184,500 − $120,000 = $64,500; you pay 12.4% on $64,500 (not the full $73,880), plus 2.9% Medicare on all $73,880.
Additional Medicare Tax
IRC §3101(b)(2) imposes an extra 0.9% Medicare on combined wages and SE earnings above $200,000 single / $250,000 MFJ / $125,000 MFS. These thresholds are NOT indexed for inflation. The 0.9% has no employer match.
Qualified Business Income (QBI) Deduction
IRC §199A allows a 20% deduction on qualified business income from pass-through entities (sole proprietorships, partnerships, S-corps). For 2026, the deduction is clean below taxable income of $201,775 single / $403,500 MFJ (Rev. Proc. 2025-32 §4.26). Above the threshold, two restrictions phase in: (1) the deduction is limited to the greater of 50% of W-2 wages paid OR 25% of W-2 wages + 2.5% of qualified property; (2) "specified service trades or businesses" (SSTBs, includes health, law, accounting, consulting, financial services) lose the deduction entirely above the full phase-in. OBBBA made QBI permanent in 2025.
Quarterly Estimated Taxes (Form 1040-ES)
If you expect to owe $1,000+ in federal tax for the year, IRC §6654 requires quarterly estimated payments. 2026 due dates: April 15, June 15, September 15, January 15 (2027). Safe-harbor rules let you avoid penalties by paying 100% of last year's total tax (110% if prior AGI > $150k) or 90% of this year's. Most freelancers use the prior-year safe harbor for simplicity. Pay online via IRS Direct Pay or EFTPS.
Should You Form an S-Corp?
An S-Corp election (Form 2553) lets you split self-employment income into (1) "reasonable compensation" paid as W-2 wages (subject to FICA) and (2) profit distributions (not subject to SE tax). Tax savings begin around $50,000 in net SE income. Costs include: payroll administration, separate Form 1120-S corporate return, state franchise tax (CA charges $800/yr minimum), unemployment insurance, and IRS scrutiny on what constitutes "reasonable" salary. An LLC alone doesn't change tax treatment, you must affirmatively elect S-Corp status. Below ~$50k net SE, the S-Corp overhead usually exceeds the savings.
Retirement Plans for the Self-Employed
Self-employed individuals have powerful retirement options: SEP-IRA (up to $72,000 in 2026, 25% of net SE), Solo 401(k) ($24,500 employee + 25% employer = $72,000 combined, $80,000 if 50+), and SIMPLE IRA ($17,000 in 2026, $18,100 enhanced under SECURE 2.0). Contributions reduce both federal income tax AND state tax. Solo 401(k) often wins because it allows both the employee deferral AND the employer contribution.
Frequently Asked Questions
What is the 2026 self-employment tax rate?
15.3% on 92.35% of net earnings: 12.4% Social Security up to the 2026 SS wage base of $184,500 (combined with W-2) plus 2.9% Medicare (no cap). Plus 0.9% additional Medicare on combined wages + SE above $200k single / $250k MFJ. Half of the basic 15.3% is deductible above the line.
Why do I multiply net earnings by 92.35%?
IRC §1402(a)(12) requires SE earnings to be reduced by 7.65% (the employer-share equivalent of FICA) before applying SE tax. This puts the self-employed on par with employees. Net × 0.9235 = the base for both 12.4% SS and 2.9% Medicare on Schedule SE.
How does the SS wage base affect SE tax?
The 2026 SS wage base is $184,500. Combined W-2 + SE earnings only pay 12.4% SS up to this cap. If W-2 = $100,000, your SE income only owes 12.4% SS on $84,500 × 0.9235 before the SS portion stops. Medicare (2.9%) has no cap.
What is the QBI deduction?
IRC §199A: 20% deduction on qualified business income from pass-through entities. Clean below $201,775 single / $403,500 MFJ taxable income for 2026. Above, wage/UBIA-based limits and SSTB restrictions apply.
When are quarterly estimated taxes due?
If you expect to owe $1,000+, you must make quarterly Form 1040-ES payments by April 15, June 15, September 15, and January 15. Safe-harbor: 100% of last year's tax (110% if AGI > $150k) or 90% of this year's.
What can I deduct as self-employed?
Schedule C business expenses: home office, business mileage, health insurance premiums (above-the-line), retirement plan contributions (SEP/SIMPLE/Solo 401(k)), half of SE tax, business meals (50%), travel, supplies, software, and contractor payments.
Should I form an LLC or S-Corp?
An S-Corp election can reduce SE tax by splitting income into W-2 wages and distributions (not subject to SE tax). Savings start around $50k net SE. Costs: payroll, Form 1120-S, state franchise tax, IRS reasonable-comp scrutiny. LLC alone doesn't change tax treatment.